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MIL OSI Translation. Region: Russian Federation –

Source: Central Bank of Russia – Central Bank of Russia –

By January 1, 2030, systemically important credit institutions (SICIs) will be required to switch to a model approach to assessing the amount of credit risk for regulatory purposes (the approach based on internal ratings – IVR). Such bill The State Duma adopted it in the second reading.

During the IRP, banks use their own models based on borrower default statistics. This allows you to more effectively and accurately assess credit risk and the capital required to cover it.

The transition to PVR should improve the risk management processes of SZKOs and increase the transparency of banking risks for the regulator. In addition, the use of PVR by all SZKOs will help level the competitive conditions in terms of regulatory requirements.

By January 1, 2030, all SZKOs must ensure the use of IRP models for the share of assets that will be determined by the Bank of Russia in a regulatory act. The transition period was established taking into account the time required by banks for preliminary preparation and obtaining permission from the Bank of Russia to apply the temporary temporary residence permit.

The regulator allows the bank to switch to the use of PVR only after checking (validating) its models. Starting from 2025, the Bank of Russia plans to begin phased validation of IVR models of SZKO. Individual plans for the transition to the use of PVR for each of the SZKOs will be pre-agreed with the regulator.

Now the transition to temporary temporary residence permits is voluntary; credit institutions with assets of at least 500 billion rubles have the right to do this. Four systemically important banks already use PVR.

Preview photo: VOJTa Herout / Shutterstock / Fotodom

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Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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