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Bank of Russia to supply information service for banks to find out client risk assessment

The centralised information service Know Your Customer (KYC) will be based on the Bank of Russia’s resources. The regulator is already developing the platform and preparing relevant amendments to the laws needed for its implementation.

This platform will classify banks’ customers by risk zone based on objective criteria as regards potential money laundering and terrorism financing transactions. Banks will be able to use the information service which will provide them with client risk assessments. Relying on these data, banks will make decisions on how to work with a particular client (decisions on a transaction or account opening). Any bank will be entitled to receive information on its clients.

‘We expect that this platform will decrease the burden for bona fide businesses, first of all small and micro enterprises, as a result of reduced duplicate requests for the same information from various credit institutions,’ explained Ilya Yasinsky, Director of the Bank of Russia’s Financial Monitoring and Currency Control Department. ‘In turn, credit institutions will be able to put more focus on their work with shady customers, and reduce preventive restrictions implemented if minor or ‘technical’ money laundering or terrorism financing risks are identified.’

The representatives of business associations who spoke at the meeting appreciated the idea of creating this platform. Businesses hope that its launch will decrease the number of banks’ wrongful refusals to conduct a transaction or open an account, and will enhance the transparency of relations between banks and their customers.

The new information system is scheduled to be launched at full scale in late 2021 — early 2022. In the course of the work on this project, the Bank of Russia is going to communicate with the business community to be able to identify potential bottle necks and receive feedback that could help it improve the system.

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