Update on Regulation of Branchless Banking in Russia

This update of CGAP’s 2008 "Notes on Regulation of Branchless Banking in Russia" incorporates research conducted by CGAP in January 2010 regarding relevant legal and policy changes through the end of 2009. It is one of 11 country updates produced by CGAP as a part of the G20 Access through Innovation (ATI) Sub-Group’s workplan.

The paper states that payment terminals, operated both by banks and nonbanks, have dominated branchless banking in Russia. Key points include:

• Recent changes in law permit nonbanks to act as payment agents and to use sub-agents;
• They also exempt payments by individuals of 15,000 rubles or less from the anti-money laundering/combating the financing of terrorism (AML/CFT) requirements;
• Other avenues that were considered important to the development of branchless banking, such as mobile banking and web-based e-money issuers, now have a lower priority;
• Policy makers are focused on developing a national retail payment card system and the possibility of establishing a post bank;
• If a new law on the national payment system and the regulation of e-money is adopted in the next year, it will significantly change the regulatory landscape, particularly for mobile banking and web-based e-money issuers.