OREANDA-NEWS. The Bank of Russia has prepared draft regulations, specifying new requirements for potential investors regarding the financial rehabilitation of banks with tougher provisions than those currently made for usual bank acquirers.

The Bank of Russia website publishes the following for discussion with professional community:
* draft Ordinance 'On Requirements for Persons (Person) who Acquire(s) in Compliance with Participation Plan of the State Corporation Deposit Insurance Agency to Implement Measures to Prevent Bankruptcy of a Bank No Less than 75 Per Cent of Ordinary Shares in a Bank in the Form of a Joint-Stock Company (Shares in the Authorised Capital Representing No Less Than Three-Fourths of Votes of a Total Number of Votes of Participants in a Bank in the Form of a Limited Liability Company)';
* draft Ordinance 'On the Procedure and Terms of Holding a Closed Tender to Select an Acquirer (Acquirers) of Banks' Assets and Liabilities'.

Unlike an acquirer, a potential investing bank, a legal entity or an individual, must hold net assets not only in the amount of a bank acquisition, but also in the amount of 10% of a bank's liabilities, taking into account loan funds extended for financial rehabilitation purposes.

This measure allows to create a required capital provision of an investor to assure capital adequacy in a banking group or a bank holding company, Mikhail Sukhov, Deputy Governor of the Bank of Russia, explains.

Banks and legal entities must conduct breaking even operations throughout the last four quarters prior to the date of application to the Deposit Insurance Agency.

In addition to standard assessment criteria of investors' financial position legal entities and individuals should enjoy satisfactory financial position in compliance with the requirements of  Regulation No. 254-P, dated 26 March 2004, 'On the Procedure for Making Loss Provisions by Credit Institutions for Loans, Loan and Similar Debts'.

Besides, while assessing investing banks' financial position the Bank of Russia will consider a whole range of supervisory information related to their financial stability.