INSTRUCTION OF THE CENTRAL BANK OF RUSSIA

of August 25, 2003 No. 105-I

About procedure for conducting checks of credit institutions (their branches) by authorized representatives of the Central bank of the Russian Federation

This Instruction establishes procedure for conducting checks of credit institutions (their branches) based on the Federal Law "About the Central Bank Russian Federation (Bank of Russia)" (The Russian Federation Code, 2002, N 28, Art. 2790; 2003, N 2, Art. 157) and Federal Law "About Banks and Banking Activity" ("Sheet of the Congress of People's Deputies of RSFSR and Supreme Council of RSFSR", 1990, N 27, Art. 357; Russian Federation Code, 1996, N 6, Art. 492; 1998, N 31, Art. 3829; 1999, N 28, Art. 3459, Art. 3469; 2001, N 26, Art. 2586; N33 (part 1), Art. 3424; 2002, N 12, Art. 1093; "The Russian newspaper" of 01.07.2003 N 126).

Checks of banks in the cases provided by articles 27 and 32 of the Federal law "About Deposit Insurance in Banks of the Russian Federation" (The Russian Federation Code, 2003, N 52 (part I), Art. 5029; 2004, N 34, Art. 3521), can be carried out with participation of employees of the "Deposit Insurance Agency" state corporation (further - the Agency) according to this Instruction.

Features of conducting such checks are established by the regulation of the Bank of Russia about features of conducting checks of banks with participation of employees of the Agency.

Credit institutions (their branches) can be performed at the request of the Board of directors of the Bank of Russia by auditing organizations.

1. General provisions

1.1. Credit institutions (their branches) are performed by the Bank of Russia for implementation of functions of bank regulation and banking supervision.

1.2. This Instruction extends:

- on the credit institutions operating in the territory of the Russian Federation;

- on structural divisions of credit institutions: the structural division of the credit institution having branches, located in place of registration of credit institution, conducting the composite balance sheet of credit institution and separate balance which is part of composite balance sheet of credit institution (further - head office of credit institution); separate divisions of credit institutions (branches and representative offices of credit institutions); internal structural divisions of credit institutions and branches of credit institutions (additional offices, credit and cash offices, operational offices, operational cash desks out of cash node, exchange points and other internal structural divisions of credit institutions and branches of credit institutions) (further - credit institutions (their branches), except for direct specifying in the text of this Instruction on credit institution, head office of credit institution, branch of credit institution, representative office of credit institution, internal structural division of credit institution or branch of credit institution);

- on the branches and representative offices of the credit institutions which obtained the license of the Bank of Russia for carrying out currency transactions (further - authorized bank), being outside the Russian Federation (in the presence of the agreement between the Bank of Russia and banking supervisor authority of foreign state on cooperation in the field of supervision of activities of credit institutions (the memorandum of understanding in the field of banking supervision) (further - the agreement (memorandum);

- on the affiliated credit institutions of authorized banks which are outside the Russian Federation (in the presence of the agreement (memorandum).

1.3. Main objective of conducting checks of credit institutions by the Bank of Russia (their branches) is assessment on site of general condition of credit institution or the separate directions it activities, including: assessment of compliance with law of the Russian Federation and regulations of the Bank of Russia, assessment of reliability of accounting (reporting) of credit institution (its branch), determination of the extent of risks, assets, liabilities, quality evaluation of assets of credit institution (its branch), size and sufficiency of own means (capital) of credit institution, assessment of risk management systems and the organization of internal control of credit institution (its branch), financial condition and perspectives of activities of credit institution, and also identification of the actions menacing to interests of creditors and investors of credit institution.

The inspections of credit institutions (their branches) which are carried out by the Bank of Russia do not carry out tasks of the audit inspections and documenting audits performed in accordance with the legislation of the Russian Federation for collection of proofs on criminal and another matters.

1.4. Credit institutions (their branches) are performed with the frequency established by the legislation of the Russian Federation and regulations of the Bank of Russia and determined taking into account:

- financial condition of credit institutions (their branches);

- exposure of credit institutions (their branches) to risks;

- estimates of risk management systems and organization of internal control of credit institutions (their branches);

- reliability of accounting (reporting) of credit institutions (their branches);

- results of the previous checks of credit institutions (their branches).

Credit institutions are performed at least once in 24 months (taking into account the features provided by Chapter 10 of this Instruction).

The list of the structural divisions of credit institution checked within check of credit institution is determined taking into account the factors specified in paragraphs the second - pole of this Item, and the features stated in subitems 10.1. 2, 11.1.1 and 11.1.2 these Instructions.

1.5. Credit institutions (their branches) are performed by authorized representatives (employees) of the Bank of Russia (daleeupolnomochenny bank representatives of Russia).

1.5.1. Credit institutions (their branches) are performed based on the document confirming powers of authorized representatives of the Bank of Russia on conducting check of credit institution (its branch) (further - the order on conducting check).

In the order on conducting check the members of the authorized representatives of the Bank of Russia forming working group numbering at least two people with indication of the head of working group and, if necessary - the deputy manager of working group (further - the head of working group), and also workgroup members are determined.

The order on conducting check is constituted in duplicate according to appendix 1 to this Instruction.

1.5.2. In case of need, including changes of members of working group, prolongation of terms of conducting check, and also conducting checks of additional offices, credit and cash offices, operational offices, operational cash desks out of cash node, exchange points and other internal structural divisions of authorized bank (its branch) (further - internal structural divisions of authorized bank (its branch) within check of authorized bank (its branch) according to Items 11.1 and 11.2 of this Instruction, amendment to the order on the conducting check which is integral part of the order on conducting check is drawn up.

Amendment to the order on conducting check is constituted in duplicate according to appendix 2 to this Instruction.

1.5.3. Information containing in the documents constituted by the Bank of Russia under the organization, carrying out and registration of results of checks of credit institutions (their branches) and having restrictive mark "For office use" is information of limited access determined as that and subject to protection in accordance with the legislation of the Russian Federation, and cannot be divulged by the Bank of Russia and credit institution (its branch) to the third parties, except as specified, stipulated by the legislation the Russian Federation and regulations of the Bank of Russia.

1.6. Treat the officials of the Bank of Russia having rights to charge conducting checks, including to sign orders on conducting checks:

- The chairman of the Bank of Russia, the First Deputy Chairman of the Bank of Russia, the vice-chairman of the Bank of Russia supervising the structural divisions of the Bank of Russia performing functions of banking supervision, the head of the Main inspection of credit institutions of the Bank of Russia (further - the Main inspection), persons replacing them - right to sign of orders on conducting any checks of credit institutions (their branches);

- the general inspector of the Main inspection (person, it replacing), the deputy general inspector of the Main inspection (the daleegeneralny inspector of the Main inspection) - right to sign of orders on conducting checks of credit institutions (their branches), supervision of which is exercised by territorial offices of the Bank of Russia which inspection activities it coordinates;

- the chief (chairman) of territorial office of the Bank of Russia, his deputies (further - the head of territorial office of the Bank of Russia) - right to sign of orders on conducting checks of credit institutions (their branches), supervision for which activities exercises this territorial office of the Bank of Russia, including orders on conducting repeated checks in connection with reorganization or liquidation of credit institution. The head of territorial office of the Bank of Russia exercising supervision of activities of credit institution, the orders having the right to sign also on conducting checks of branch of credit institution, the person under surveillance to other territorial office of the Bank of Russia (in coordination with the territorial office of the Bank of Russia exercising supervision of activities of this branch of credit institution, according to the procedure, established by the regulations of the Bank of Russia determining features of the organization and conducting checks of credit institutions (their branches);

- the head of department of territorial office of the Bank of Russia, the head of operation management of territorial office of the Bank of Russia, - right to sign of orders on conducting checks of credit institutions (their branches), supervision for which activities exercises this structural division of the Bank of Russia (in case of creation of department of territorial office of the Bank of Russia, operation management of territorial office of the Bank of Russia and provision to their workers of powers on conducting checks);

- the head of payment processing center of territorial office of the Bank of Russia - right to sign of orders on conducting checks of credit institutions (their branches), supervision for which activities exercises territorial office of the Bank of Russia, when conducting checks concerning accomplishment of standard rates of required reserves by credit institutions; concerning implementation by authorized bank (its branch) of separate types of banking activities with cash foreign currency and transactions with checks (including travel checks) which nominal value is specified in foreign currency, with participation of physical persons (further - transactions with cash foreign currency and checks) in internal structural divisions of authorized bank (its branch); on observance by credit institutions (their branches) of regulations of the Bank of Russia concerning cash circulation regarding requirements to rooms for making of transactions with values and requirements to motor transport used in transit, collections of cash (further - questions of cash circulation).

The order on conducting check based on the solution of the Board of directors of the Bank of Russia or the Chairman of the Bank of Russia on conducting check of foreign affiliated credit institution of authorized bank, foreign subsidiary and representative office of authorized bank the Chairman of the Bank of Russia, the First Deputy Chairman of the Bank of Russia, the vice-chairman of the Bank of Russia supervising the structural divisions of the Bank of Russia performing functions of banking supervision, the head of the Main inspection, person has the right to sign, them replacing.

The order on conducting repeated check of credit institution (its branch) based on the motivated solution of the Board of directors of the Bank of Russia and the order on conducting check of credit institution by auditing organization based on the solution of the Board of directors of the Bank of Russia the First Deputy Chairman of the Bank of Russia, the vice-chairman of the Bank of Russia supervising the structural divisions of the Bank of Russia performing functions of banking supervision, the head of the Main inspection, person, them replacing.

The order on conducting check of internal structural division of credit institution (its branch) out of the location of credit institution (its branch) has the right to sign:

the general inspector of the Main inspection coordinating inspection activities of the territorial offices of the Bank of Russia exercising supervision of activities of credit institution (its branch);

the head of territorial office of the Bank of Russia exercising supervision of activities of credit institution (its branch), and the head of territorial office of the Bank of Russia on the location of internal structural division of credit institution (its branch) - under approval and according to the procedure, established by the regulation of the Bank of Russia determining features of the organization and conducting checks of credit institutions (their branches).

1.7. Check of credit institution (its branch) begins with the moment of presentation by the head of working group or workgroup member of the order on conducting check of credit institution (its branch) (further - start date of check).

Check of credit institution (its branch) comes to the end after transfer of the inspection statement of credit institution (its branch) (further - the inspection statement) for acquaintance to governing bodies of credit institution based on the protocol of reception-transmission of the inspection statement or the registered mail (further - date of completion of check).

1.8. Check of credit institution (its branch) is performed for the period activities of credit institution (its branch) which cannot exceed five calendar years of activities of credit institution (its branch) preceding year of conducting check (further - the checked period).

1.8.1. The check of credit institution (its branch) performed according to the petition of credit institution is carried out on questions, for the period and to terms which are coordinated with credit institution.

1.9. The Bank of Russia has no right to carry out more than one inspection of credit institution (its branch) on the same questions for the same accounting period of activities of credit institution (its branch), except as specified, if such inspection is carried out:

- in connection with reorganization or liquidation of credit institution;

- according to the motivated solution of the Board of directors of the Bank of Russia. Such decision of the Board of directors of the Bank of Russia can be made according to the procedure of control of activities of territorial office of the Bank of Russia performing or based on the petition of the relevant structural division of the Bank of Russia for the purpose of assessment of financial condition and quality of assets and liabilities of credit institution. For the specified purposes the petition of structural division of the Bank of Russia shall contain instructions on the revealed signs of unstable financial condition of credit institution if these signs created real threat to interests of creditors and investors of credit institution. The specified signs shall come to light and be estimated according to the techniques established by regulations of the Bank of Russia.

1.9.1. Conducting repeated check of credit institution (its branch) on the same questions for the same accounting period of activities of credit institution (its branch) (further - repeated check of credit institution (its branch) based on the motivated solution of the Board of directors of the Bank of Russia is performed with the assistance of representatives of central office of the Bank of Russia.

1.9.2. In case of conducting repeated check of credit institution (its branch) in the order the checked period and the questions which are subject to check are specified conducting check.

1.10. The official of the Bank of Russia who signed the order on conducting check based on the message of the head of working group can make the decision on delay of the beginning of check (in view of impossibility to begin it) or on suspension of check of credit institution (its branch) in the presence of the circumstances testimonial of objective impossibility of conducting check, including in cases:

threats of life and to health of the head and workgroup members;

counteractions of credit institution (its branch) to conducting check, including absence of credit institution (its branch) on its location (address) (except as specified, connected with change by credit institution (its branch) of the location (address) in accordance with the established procedure);

other bases interfering the beginning of check and further conducting check.

1.10.1. The notification on suspension of check of credit institution (its branch) constituted according to appendix 3 to this Instruction goes to the head of credit institution (its branch).

1.10.2. The official of the Bank of Russia who made the decision on delay of the beginning of check or on suspension of check of credit institution (its branch) makes the decision on the beginning of check or on renewal of check of credit institution (its branch).

1.10.3. In case of renewal of check of credit institution (its branch), in case of need, amendment to the order on the conducting check constituted according to appendix 2 to this Instruction is drawn up.

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