OREANDA-NEWS. September 29, 2011. Sviaz-Bank and the International Analytics Unlimited Bank Club have held, with support from the Moscow Chamber of Commerce and Industry, a subject round table on pledge in current lending practice.

The round table participants present at this Club event discussed the effect of pledge quality on the financial standing of banks and the level of security of loan portfolios, shared experiences in asset appraisal and sale, and exchanged views on ways in which possible improvements could be made in pledge laws.

The round table participants voiced concern over the possibility of tougher requirements being made to loan security by the regulator. Anatoly Milyukov, Vice President of the Association of Russian Banks, spoke about his misgivings about this possibility. Tougher requirements, he said, would be a restraining factor for growth in lending because banks would have to put aside resources for more reserves.

Gennady Dongayev, head of Sviaz-Bank’s Pledge Service, told the round table participants about the pledge-handling practice used in the Bank.

“Up to 60% of Russian banks do not verify the pledges after they have made a loan. If the borrower defaults on his obligations, a bank certainly has to claim the pledge, which either has not been delivered, or its trace has been lost. A bank must, therefore, have a pledge-handling unit of one kind or another. Our Pledge Service has been in operation for over five years. We determine the market value of the property delivered as security for a loan, monitor pledge movement, and evaluate its selling price,” said Gennady Dongayev in his address.

The event was attended by pledge-handling unit representatives of Uralsib, Otkrytiye, and Renaissance Capital banks, MSP Bank, Sberbank-AST electronic trading platform, law and appraisal companies, banking associations, and rating agencies.