15.01.2024, 10:42
Russian banks will be punished more severely for defrauding consumers
Source: OREANDA-NEWS
OREANDA-NEWS In Russia, it was proposed to toughen the punishment for banks for defrauding consumers of financial services. This is reported by the Izvestia newspaper, citing sources close to the Central Bank.
The regulator proposes to make the punishment for defrauding customers comparable to fines for violating anti—money laundering legislation - now they range from 0.1 to 1 percent of own funds (capital). Thus, the amount of fines will increase from 20-40 thousand to hundreds of millions or even six billion rubles. Such sizes are necessary to nip in the bud the desire of credit institutions to engage in misselling, the sources of the publication explain. If the measure is adopted, fines may be raised as early as 2024.
"The management of banks issues bonuses to employees for the performance of indicators that are several times higher than the amount of possible sanctions for an official. And the fine for a legal entity is even less than the cost of coffee for employees of one department. The profit that the bank receives as a result of misselling continues to be such a serious income item that it allows it to compensate for the restrictions of the Central Bank and losses due to economic shocks," explained Galaktion Kuchava, head of the regional block of the project "For the Rights of Borrowers" of the Popular Front.
The head of the Central Bank, Elvira Nabiullina, spoke about her intentions to increase fines for violating consumer rights in September. According to her, the profit of credit institutions from the sale of products is many times higher than the amount of punishment. Nabiullina recalled that in a number of countries such fines are multi-million and multi-billion.
Nabiullina also warned about the possible introduction of a ban on banks selling certain products to individuals. In the spring, some irregularities were revealed in the sale of insurance and investment products by banks, especially in large banks. The regulator has the right to demand a repurchase if these products were sold in bad faith, she recalled.
The regulator proposes to make the punishment for defrauding customers comparable to fines for violating anti—money laundering legislation - now they range from 0.1 to 1 percent of own funds (capital). Thus, the amount of fines will increase from 20-40 thousand to hundreds of millions or even six billion rubles. Such sizes are necessary to nip in the bud the desire of credit institutions to engage in misselling, the sources of the publication explain. If the measure is adopted, fines may be raised as early as 2024.
"The management of banks issues bonuses to employees for the performance of indicators that are several times higher than the amount of possible sanctions for an official. And the fine for a legal entity is even less than the cost of coffee for employees of one department. The profit that the bank receives as a result of misselling continues to be such a serious income item that it allows it to compensate for the restrictions of the Central Bank and losses due to economic shocks," explained Galaktion Kuchava, head of the regional block of the project "For the Rights of Borrowers" of the Popular Front.
The head of the Central Bank, Elvira Nabiullina, spoke about her intentions to increase fines for violating consumer rights in September. According to her, the profit of credit institutions from the sale of products is many times higher than the amount of punishment. Nabiullina recalled that in a number of countries such fines are multi-million and multi-billion.
Nabiullina also warned about the possible introduction of a ban on banks selling certain products to individuals. In the spring, some irregularities were revealed in the sale of insurance and investment products by banks, especially in large banks. The regulator has the right to demand a repurchase if these products were sold in bad faith, she recalled.
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