Topic 8. BANKING SUPERVISION

The concept and essence of banking supervision

Banking supervision is the supervision of the Bank of Russia over the execution and compliance by credit institutions with the legislation governing banking activities, the regulations established by it, including financial standards and accounting and reporting rules.

The essence of banking supervision is to verify the compliance of the decisions and actions of a credit institution with the laws governing banking activities and the regulations of the Bank of Russia.

In fact, this is supervision over the implementation of normativity in banking. Its significance lies in the fact that it is used by the Bank of Russia to manage risks in the banking system.

The Bank of Russia does not have administrative powers to manage commercial banks and other credit institutions. He has no right to interfere in the activities of commercial banks and other credit organizations, since they are independent and operate on the basis of contractual relations. Therefore, the Federal Law did not grant the Bank of Russia the authority to control the expediency of the activities of credit institutions. He was granted the right to exercise supervision, that is, to observe the credit institution from the point of view of the normativity of its decisions. This means that the Bank of Russia can check whether a credit institution complies with the laws, financial regulations and regulations of the Bank of Russia.

Remote monitoring is monitoring the activities of credit institutions on the basis of banking and, in particular, accounting documents submitted by it (balance sheets, profit and loss statements, payment documents, etc.).

To solve these problems, divisions of banking supervision have been created in the system of the Bank of Russia - the Department of Prudential Supervision, the Department for Licensing Credit Institutions and some other departments, and in territorial institutions - departments (departments) for regulating banking activities.

Contact supervision is an inspection of the activities of credit institutions with access to their locations and the study of all banking documents requested by a group of inspectors.

For these purposes, special divisions are created in the structure of the Bank of Russia - the Department for Inspection of Credit Institutions and the corresponding structures in its territorial institutions (departments, departments).

Both types of banking supervision should be interconnected. The nature of this relationship is important from the point of view of the speed of supervision and the reliability of its results.

Objects of banking supervision

The objects of banking supervision are that part of the banking system and banking activities that, in accordance with the requirements of laws and in the manner prescribed by them, must be controlled by the Bank of Russia.

The correct definition of the objects of banking supervision is important for determining the competence of the Bank of Russia to conduct inspections of the activities of credit institutions. In addition, the precise definition of the objects to be inspected makes it possible to optimize the Bank of Russia's expenses on banking supervision.

Banking supervision in the form in which it is currently provided for in Russian legislation does not cover the entire banking system, but only applies to credit institutions. In other words, its object is only the lower level of the banking system. The top level of the banking system - the Bank of Russia - is not subject to supervision by any body whatsoever.

The Federal Law "On the Central Bank of the Russian Federation" provides for some elements of control by the State Duma over the Bank of Russia. In fact, they relate to the status of the Bank of Russia.

In other countries, there is a so-called cross-control over the functioning of the banking system. This means that the banking system is controlled not only by the central bank, but also by various government organizations. Therefore, the reports of the central bank and all its activities are audited by the state.

The independence of the Bank of Russia must be supplemented by its responsibility for the correctness of its decisions, including in the field of banking supervision.

Credit organizations and their activities as an object of banking supervision

In the organization and activities of credit institutions in accordance with the objectives of banking supervision and the way they are enshrined in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)", several subjects of banking supervision can be distinguished.

The first subject of banking supervision that we consider, and in particular bank audits, is the compliance by a credit institution with the legislation and banking rules established by the Bank of Russia.

The legislation does not clearly state which laws the Bank of Russia should check compliance with. Therefore, this question is interpreted by experts restrictively. At best, purely banking laws are taken into account, primarily the Federal Law "On Banks and Banking Activities", which, of course, is not enough, since, as was said, banking activities are regulated by regulations of various branches of law.

In this regard, the role of legal departments in the Bank of Russia becomes quite obvious, being able to determine the entire composition of regulations, the violation of which creates risks in banking activities. However, the role of lawyers, unfortunately, is small, therefore, something similar to a niche is being created in the activities of banks, into which the Bank of Russia does not look. This is where the most common abuses in credit institutions originate, which sooner or later become the cause of their collapse, as well as the collapse of clients.

With regard to supervision and inspection of the implementation of banking rules, there are also many unresolved problems here. First, the Bank of Russia annually issues about a thousand different acts. These acts, as already mentioned, are by no means flawless in terms of legal technique in all cases. In addition, they are not systematized enough. In this regard, problems arise in the accessibility of regulations not only for the general consumer, but also for the employees of the Bank of Russia themselves. Secondly, there is no clear division and specialization in banking supervision itself, and most importantly, in the inspection of credit institutions, which reduces its quality.

The second subject of banking supervision is the fulfillment by the credit institution of the financial standards stipulated by the legislation and regulations of the Bank of Russia.

Regulations are technical standards. This is a banking technique, a technology for managing a credit institution, the correct construction of which eliminates the risk of illiquidity and insolvency in relation to creditors and bank customers.

The third subject in the object of banking supervision is checking the correctness of accounting and the reliability, provided for by the laws and regulations of the Bank of Russia, of the reporting of credit institutions.

This question is considered central. Unlike legal and financial-analytical problems, the problem of auditing accounting and reporting reliability, perhaps due to its simplicity, attracts the most attention during audits. In this sense, supervision is still only at the first stage of its development. This is the stage of comparisons and isolated assessments.

Tasks and functions of banking supervision

The tasks and functions of banking supervision are specified and determined by the goals and objects of banking supervision.

The tasks of banking supervision are the inspection by the Bank of Russia of those objects that are determined by the subject of banking supervision. The three main subjects correspond to the three tasks of banking supervision:

▪ checking compliance with laws and banking regulations,

▪ checking compliance with economic standards,

▪ audit of accounting and reporting.

The functions of banking supervision are the directions of the documentary or direct verification of the activities of a credit institution carried out by the Bank of Russia. According to banking specialists, there is a certain list of these functions:

▪ study of legal issues of the bank’s activities and its compliance with the charter and license;

▪ checking the credit institution's compliance with the provisions of the banking license;

▪ analysis of the bank’s balance sheet and reporting;

▪ study of the dynamics of individual indicators of banking activity and the bank’s development prospects;

▪ verification of decisions of management bodies;

▪ checking the work of the audit commission;

▪ analysis of contractual relations of a credit institution with clients, depositors, debtors and creditors;

▪ checking compliance with the contractual obligations of the credit institution in its relationships with clients and depositors, debtors and creditors;

▪ analysis of methods for placing own and temporarily borrowed funds, checking the fulfillment of obligations under contracts (loans, deposits, conversion, currency transactions, securities);

▪ review of risk management;

▪ checking the formation of reserves;

▪ verification of guarantees;

▪ checking the validity and legality of income generation;

▪ study of contracts and causes of losses for certain types of activities;

▪ identification of facts of distortion of income and expenses, detection of possible unproductive losses, including those associated with the results of the application of sanctions for violation and non-compliance with contractual obligations;

▪ identifying the causes, motives and circumstances that contributed to banking violations;

▪ clarification of the purposes of violation of regulations of the Central Bank of the Russian Federation, clarification of the reasons for the distortion of reporting indicators, economic standards,

▪ finding out the reasons and purposes of the bank conducting unprofitable, ineffective banking operations and transactions, primarily creating an increased risk and entailing a violation of economic standards;

▪ checking the credit institution's compliance with the Bank of Russia's regulations.

Banking Supervision Units

In the Bank of Russia system, two groups of divisions can be distinguished:

a) regulatory;

b) supervisory.

Regulatory departments include, for example, departments and their respective departments, such as the department of issuing and cash transactions, the department of regulation of monetary circulation, the department of licensing; legal department, administrative department, accounting and reporting department, securities department; department of currency regulation and currency control; department of informatization, various kinds of settlement and cash centers and some other subdivisions.

The supervisory block consists of two departments and their respective departments, departments in the territorial offices of the Bank of Russia: the Banking Supervision Department and the Department for Inspection of Credit Institutions.

There are no absolute divisions between regulatory and supervisory blocs. They are not independent in making final decisions and are not isolated from each other.

For example, the licensing department, while carrying out a state audit of a credit institution, is simultaneously obliged to verify the accuracy of the facts that are reflected in the documents submitted by the founders. So, when issuing a general license, the licensing unit can resort not only to checking the documents submitted by the heads of the credit organization, but also send a corresponding request to the banking supervision unit or to the inspection unit of credit organizations in order to conduct an appropriate check.

The federal law "On the Central Bank of the Russian Federation (Bank of Russia)" provides for the possibility of creating a special supervisory body under the Bank of Russia.

In part 4 of Art. 55 of this Law says that the supervisory and regulatory functions of the Bank of Russia can be carried out by it directly or through a banking supervision body created under it. It further states that the decision to establish this body is made by the Board of Directors.

The advisory body, which discusses the results of the audit of a credit institution, is not provided for by law.

In accordance with the Instruction, inspections of credit institutions and their branches are carried out by representatives of the Bank of Russia authorized by the Board of Directors: the Chairman of the Central Bank of the Russian Federation and his deputies; heads and employees of the Department of Banking Supervision of the Bank of Russia, the Main Directorate for Inspection of Commercial Banks of the Bank of Russia, the Main Directorate for Foreign Exchange Regulation and Foreign Exchange Control of the Bank of Russia; heads of main departments (chairmen of national banks) of the Bank of Russia and their deputies; heads and employees of departments of banking supervision, inspection of commercial banks, as well as currency regulation and currency control of the main departments (national banks) of the Bank of Russia.

Inspection of credit institutions

When inspecting credit institutions, the following stages can be distinguished:

▪ Planning inspections

▪ Making a decision on inspection and documenting it

▪ Solving organizational issues related to the entry of inspection groups into credit institutions

▪ Study by the inspection team

▪ documents submitted by the credit institution

▪ Preparation of a draft inspection report

▪ Study of the draft act in the functional divisions of the Bank of Russia

▪ Finalization of the inspection report

▪ Making a decision on the act

▪ Sending the inspection report to the management of the Bank of Russia (territorial institution)

▪ Familiarization of the head of the credit institution with the inspection report

▪ Signing of the inspection report by the management of the credit institution.

Inspection is an integral part of banking supervision, and in order to correctly determine its functions and structure, it is necessary to find out what goals it pursues or should pursue. There are some goals that it should not pursue.

The objectives of the inspection of credit institutions are formulated in Art. 55 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)", but ultimately due to the goals of the Bank of Russia, which are enshrined in Art. 3 of the same Law, so the analysis of the entire tree of goals begins with them.

As mentioned above, the goals of the Bank of Russia are: maintaining the purchasing power of the ruble, strengthening and developing the banking system, and ensuring the smooth and efficient functioning of the settlement system.

The next level of goals, which are predetermined by the goals of the Bank of Russia, is supervision over the state of the banking system as such. This means that the Bank of Russia is obliged to manage systemic risks in the banking system.

In order to manage systemic risks, the Bank of Russia carries out banking regulation and banking supervision. Banking regulation means that the Bank of Russia sets financial standards for banks, and banking supervision means that the Bank of Russia oversees specific banks and inspects their banking activities. Therefore, the objectives of the inspection of the Bank of Russia are subordinate to the objectives of banking supervision, and the objectives of banking supervision are subordinate to the objectives of banking regulation.

A significant improvement in the organization of the inspection of credit institutions is precisely that not only the credit institution is inspected, but at the same time those credit institutions that are its correspondents. Then it will be possible to more effectively prevent systemic risks fraught with crises and financial shocks in society.

The immediate objectives of the inspection of credit institutions are formulated in Art. 55 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)", which literally says the following: "The Bank of Russia exercises constant supervision over compliance by credit institutions with banking legislation, Bank of Russia regulations, in particular the mandatory standards established by them. The main goal of banking regulation and supervision - maintaining the stability of the banking system, protecting the interests of depositors and creditors. The Bank of Russia does not interfere in the operational activities of credit institutions, with the exception of cases provided for by federal laws. "

The general purpose of the inspection is to provide the Bank of Russia with information about the real situation of the credit institution. This general goal includes two specific goals. First, the inspection process should ascertain the state of the credit institution and its prospects, and secondly, it is necessary to collect and analyze information that allows one to draw a conclusion about the impact it has on other credit institutions. Each of the goals is divided into parts defined in the law: it is the observance of laws and other regulations; acts, economic standards and rules of accounting and reporting.

According to these purposes, two general objects of inspection should be distinguished:

a) a credit institution as such;

b) system communications of credit organizations.

In each of these objects, in accordance with private goals, three subjects of inspection of banking activities can be distinguished:

a) legal relations,

b) financial relations;

c) accounting and reporting

Unfortunately, the practice is such that banking inspection is limited mainly to the study of the first of these objects - the credit organization as such. The main drawback of the inspection is that the second object is practically unexplored - the banking system, that is, the relationship between specific credit institutions.

The objectives of inspecting credit institutions are provided for in Bank of Russia Instruction No. 19 dated February 1996, 34 "On the Procedure for Conducting Inspections of Credit Institutions and Their Branches by Authorized Representatives of the Central Bank of the Russian Federation (Bank of Russia)".

Inspections of credit institutions and their branches are carried out by representatives of the Bank of Russia authorized by the Board of Directors. Chairman of the Central Bank of the Russian Federation and his deputies; heads and employees of the Department of Banking Supervision of the Bank of Russia, the Main Directorate for Inspection of Commercial Banks of the Bank of Russia, the Main Directorate for Foreign Exchange Regulation and Foreign Exchange Control of the Bank of Russia; heads of main departments (chairmen of national banks) of the Bank of Russia and their deputies; heads and employees of departments of banking supervision, inspection of commercial banks, as well as currency regulation and currency control of the main departments (national banks) of the Bank of Russia.

Instruction No. 34 provides that inspections of credit institutions and their branches on behalf of the Bank of Russia are appointed by: the Chairman of the Bank of Russia or his deputy in charge of the division carrying out the inspection; the head of the Main Territorial Department (National Bank) of the Bank of Russia - in relation to any credit institutions and their branches located in the area of ​​operation of this territorial institution of the Bank of Russia If the credit institution is located in the area of ​​operation of one territorial institution of the Bank of Russia, and its branches activities of other territorial institutions of the Bank of Russia, inspections of this credit institution, as well as its branches, are appointed by the relevant heads of the territorial institutions of the Bank of Russia with the obligatory informing of the institution of the Bank of Russia in whose territory the credit institution is located. Cancellation of the initiated inspection is carried out by a written order of the person who ordered the inspection, indicating the reasons for the cancellation (clause 4) In cases stipulated by the current legislation, inspections of credit institutions and their branches are carried out in coordination with law enforcement and financial authorities (clause 5).

Procedure for Inspection of Credit Institutions

Issues of inspection of credit institutions in the most general form are provided for in Art. 55 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".

At present, Bank of Russia Instruction No. 19 dated February 1996, 34 "On the procedure for conducting inspections of credit institutions and their branches by authorized representatives of the Central Bank of the Russian Federation (Bank of Russia)" is also in force.

Grounds for conducting inspections. The question of the grounds for conducting inspections in Russian banking practice, unlike foreign ones, is quite formalized.

Inspections of credit institutions and their branches are carried out on the basis of inspection plans drawn up for each quarter by the structural divisions of the Bank of Russia and its territorial institutions, as provided for by Instruction No. 34, and approved by the heads of these divisions and institutions. Unscheduled inspections are carried out at the direction of the Chairman of the Bank of Russia or his deputies in charge of the divisions listed in the Instruction, the head of the territorial branch of the Bank of Russia.

Note that both unscheduled and scheduled inspections can be initiated by many heads of structural divisions, who, in turn, receive relevant information about the financial and legal condition of the bank from their subordinate divisions and specialists. Therefore, in practice, the circle of initiators of bank audits is very wide.

Instruction No. 34 provides that "inspection plans include, first of all, credit institutions in respect of which there is evidence of their unstable financial situation or gross violations of the rules governing their activities, as well as credit institutions and their branches that have not been inspected by the Bank Russia or its territorial offices for more than two years.

The Instruction also states that, if necessary, audit plans include conducting audits of currency and other valuables located in cash vaults and cash desks of credit institutions and their branches, as well as under the responsibility of cash workers of operating cash desks and cash desks for preparing advances with carry-over balances, and exchange offices.

The procedure for the Bank of Russia to conduct an audit of a credit institution is not defined in the current legislation. This procedure is regulated by the Bank of Russia - its Instruction, which provides the basic rules for organizing and conducting inspections of credit institutions and their branches.

The decision to appoint an audit is made in writing. It indicates the full name, location, registration number of the audited credit institution, as well as branches, type of audit, composition of the working group, start and end dates of the audit.

At the same time, the task for the working group is also approved, which should provide for specific verification issues. If necessary, the assignment specifies the numbers of balance and off-balance accounts, transactions to be verified, a list of documents subject to selective verification, the period for which these documents and transactions will be verified.

According to the Instructions, other divisions of the Bank of Russia may also participate in preparing assignments for a working group in specific areas. The head of the working group, either independently or in agreement with the head who appointed the check, supplements or even refines the task for the check.

Inspections of credit institutions and their branches are carried out comprehensively or in separate areas of their activities. Comprehensive inspections of credit institutions and their branches should include verification of the reliability of reports submitted to the Bank of Russia; compliance of the operations performed with the banking legislation and regulations of the Bank of Russia; compliance by this credit institution with mandatory economic standards established by the Bank of Russia in accordance with the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".

The Instruction states that comprehensive inspections of a credit institution with a branch network are carried out on a consolidated basis, that is, they are carried out simultaneously in a credit institution, as well as in its branches (all, if their number does not exceed five, or some of them with the worst performance ).

Inspections of credit institutions and their branches are carried out within the timeframe that is necessary and sufficient to fulfill the established task. At the same time, comprehensive inspections of credit institutions are carried out within a period of up to 60 days, and inspections in certain areas of activity of a credit institution or its branches - up to 30 days. It is allowed to extend these periods by the head who ordered the inspection, but not more than 10 days.

To inspect a credit institution and its branches, authorized divisions form working groups of their employees, as well as employees of other structural divisions of the Bank of Russia and its territorial branches, taking into account the proposals of the heads of these divisions. The head of the working group is appointed from among the members of the authorized units. The heads of structural subdivisions submit proposals to the authorized subdivisions on conducting inspections on issues within their competence. Members of the working group must have a special (economic, legal, technical) education necessary to perform the work assigned to them. The working group cannot include persons who own a share (shares) of the audited credit institution or have received a loan in it, or have placed their deposits, or have close relatives (mother, father, wife, husband, children, sisters, brothers ) holding senior positions in the management bodies of the credit institution, branches. The size of the working group is determined depending on the amount of work to be done.

The working group inspecting a credit organization has the right to:

a) enter the premises of the audited credit institution, including the premises used for storing documents (archives), cash and valuables (cash vaults), computer data processing (computer room) and storing data on machine media, with the involvement of employees of the audited credit institution to leave these premises;

b) use their own organizational and technical means necessary for carrying out the check, including computers, floppy disks for them, duplicators, calculators, radiotelephones; bring in and take out these technical means from the building of the Trusted Credit Organization (its branches);

c) receive from the heads and authorized employees of the audited credit institution, its branches the documents necessary for verification, available in this credit institution, branches, including: constituent documents; minutes of meetings of the management bodies of the audited credit institution and its branches; orders and other administrative documents issued by the heads of this credit institution, its branches, divisions, decisions of their credit committees; acts of internal control; acts of audits of supervisory and regulatory authorities; primary and other accounting, accounting and reporting and monetary settlement documents, information about operations, accounts and deposits; documents related to computer support for the activities of the audited credit institution, its finals (description of data structures on machine media, program algorithms and technical instructions for the tasks being solved, lists of output forms with printed samples, a log of registration of changes to the software, a log of failure situations in the solution tasks (for any requested date), etc.);

d) receive references and clarifications from the managers and employees of the audited credit institution, its branches and subdivisions, as well as written explanations in case of non-fulfillment or improper fulfillment by them of the requirements of banking legislation or Bank of Russia regulations; demand a demonstration and get acquainted with the operation of the hardware and software used by this credit institution and its branches;

e) if necessary, independently or with the help of the audited credit institution, its branches, make copies of the received documents, including (on its own magnetic media) copies of files, demand and receive copies of any records stored in local area networks and autonomous computer systems, and also transcripts of these records;

f) present other requirements to the managers and employees of the audited credit institution based on their duties stipulated by the cited Instruction.

The working group is obliged not to disclose information classified by law as banking, commercial and other secrets, as well as to ensure the safety and return of documents and files received from the credit institution, its branches, to acquaint the heads of the audited credit institution, its branches with the results of the audit, to draw up the results of the audit in accordance with the act.

The credit institution and its branches have the right to require the working group to comply with the specified obligations, to appeal against the actions of the working group to the head who appointed the inspection.

The head of the working group for the verification of a credit institution, its branches distributes duties among the members of the working group (drawn up in a separate document), establishes the procedure and mode of their work, taking into account production needs, controls the fulfillment of the task assigned to them, gives them binding instructions on the preparation of materials. The right to set additional tasks for the members of the working group and redistribute their duties, take over the inspection of any area of ​​activity of the given credit institution (its branch), suspend the inspection in case of opposition to it from the audited credit institution, its branches or other third parties.

The head of the working group may request and receive from the participants (shareholders) and clients of the audited credit institution, with their consent, the information necessary to establish the actual circumstances, including to confirm the data contained in the documents received from the audited credit institution, its branches.

The head of the working group has the right during the inspection, in agreement with the head of the credit institution, to seal individual office premises of the inspected credit institution and its branches, if at the moment it is impossible to otherwise ensure the safety of documents, cash, valuables or to inspect the relevant area of ​​activity of this credit institution (its branch). To do this, use the seal of the relevant territorial office of the Bank of Russia or directly the Bank of Russia.

The head of the working group is not entitled to oblige a member of the working group to change his conclusions or assessments based on the materials of his audit. In case of disagreement with these conclusions and assessments, the head of the working group may organize a re-inspection of the relevant section of the credit institution's activity (its branch). However, if a member of the working group insists on his initial conclusions and assessments, the head of the working group is obliged to immediately inform the head who appointed the inspection, who has the right, based on the available materials, either to confirm the disputed conclusions and assessments, or to recognize them as completely or partially unfounded and then appoint a second check. The results of the re-inspection are final, unless otherwise decided by the manager who appointed this inspection.

Consider the duties in the form in which they are enshrined there. As stated in the Instruction, credit institutions (their branches) during the inspection period must facilitate its conduct, and, in particular, they are obliged to provide for this period each member of the working group with unhindered (upon request) entry and exit from the building and other office premises of the inspected credit institution and its branches throughout the working day, and if necessary - after hours. For unimpeded passage, it is necessary and sufficient for a member of the working group to present to the representative of the security or security service of the inspected credit institution (branch) his official ID or a pass issued by the Bank of Russia or its territorial office.

In the interest of strengthening the rule of law, it should be provided that if a member of the working group is replaced during the audit period, then in this case the territorial branch of the Bank of Russia draws up this replacement with a document of strict accountability and sends information about this to the appropriate division of the central office.

If the replacement is connected with the removal of a member of the working group from conducting an audit, then in this case a reasoned decision of the head who ordered the audit should be sent to the central office of the Bank of Russia.

Further, Instruction No. 34 states that none of the managers or employees of the audited credit institution, its branches, except in cases established by federal law, is entitled to: conduct a personal search of the members of the working group, official documents and organizational and technical means in their use, take away these documents, things, organizational and technical means, otherwise deprive the working group of the opportunity to use these items during the inspection, require the members of the working group to give any oral and written obligations / present other requirements to them that are not provided for by the commented Instruction.

Instruction No. 34 regulates in detail the obligations of a credit institution. The audit begins with the fact that on the first day of visiting a credit institution, its management must organize a meeting of the working group with the head and chief accountant of the audited credit institution (its branch) or persons replacing them, as well as with the heads of the main departments. At this meeting, the head of the working group must familiarize all its participants with the powers of the working group and the obligations of the audited credit institution (branch). The head of a credit institution (branch) must take specific measures to fulfill the specified obligations.

According to the Instruction, the members of the working group should be allocated a workplace in an office space isolated from the employees of the credit institution and unauthorized persons, equipped with the necessary furniture, a fireproof cabinet for storing documents, a computer equipped with software for the tasks being solved in this credit institution (branch) and an appropriate base data generated at the time of verification, calculators, means of multiplying equipment, telephone communications and fire alarms, doors and windows with the necessary locking devices. For the entire inspection period, entry into this room is allowed only with the permission of the working group.

The heads of the credit organization are obliged to notify the employees of the audited credit organization and its branches about the beginning of the audit, the location and telephone numbers of the working group.

The instruction provides that, at the request of the head of the working group, a notification may also be sent to individual participants (shareholders) and customers of a credit institution, its branches.

The credit institution is obliged to issue, at the request of the working group, all the certificates, explanations and documents it needs, if necessary, make copies of them or provide the working group with the opportunity to make these copies independently, certify the certificates and copies of documents with the signature of the responsible official and the seal of this credit institution (branch) . None of the managers and other employees of the audited credit institution (branch) has the right to refuse to issue the necessary documents to the working group in connection with commercial or other secrets, unless otherwise established by federal law.

Non-fulfillment or improper fulfillment by the audited credit institution of the obligations stipulated by Instruction No. 34 is considered as counteraction to the conduct of the audit. Each such case is drawn up by an act in the prescribed form. This act is signed by the head of the working group and on the same day is submitted to the head who appointed the inspection, who, within three days from the date of signing the act, must make a decision on it and inform the head of the working group about it. This act may be the basis for suspending the audit, as well as for taking the prescribed measures of influence against the audited credit institution (its branch).

An audit of a credit institution and its branches may begin suddenly or with prior notice to the head of the relevant credit institution (its branch). The decision on this issue is made by the head who appointed the check, or on his behalf by the head of the structural unit authorized to conduct this check.

Notification must be made in writing or orally followed by written confirmation. This notification may contain a requirement to prepare materials and documents necessary for verification in advance, as well as to carry out other preparatory measures provided for by Instruction No. 34 (allocation of office space for the working group, equipping it with technical means, etc.).

An audit of a credit institution and its branches should begin with the members of the working group presenting their powers to the head of the given credit institution (branch). These powers are confirmed by the corresponding order, which is issued to the working group by the head who appointed the check. An instruction to inspect a credit institution (branch) is issued in the prescribed form (given in Appendix 2 to Instruction No. 34). The signature of an official on the order shall be certified by the seal of the Bank of Russia or its respective territorial office. The specified instruction must be registered with the structural unit authorized to conduct this verification. If the working group is formed on a mixed basis, the order is subject to registration with the relevant inspection unit.

The verification of a credit institution and its branches is carried out by a working group in accordance with banking legislation and regulations of the Bank of Russia. Specific forms and methods of checking banking operations and documents are determined by the members of the working group on the spot, taking into account the instructions of the head of this group, as well as the recommendations of the head of the structural unit authorized to conduct the check of this credit institution (its branches), and the head who appointed this check.

Documents and other materials requested by the working group are delivered (transferred) by the credit institution (its branch) to the working place of the members of the working group within the terms and procedure established by this working group. At the end of the working day, the specified documents and materials remain in the office, designed to accommodate the working group, and, if necessary, all or part of these materials and documents are returned daily to their places of permanent storage. Documents and materials are received and returned against signature in a special journal. At the end of the working day, the office space allocated for the accommodation of the working group must be locked, sealed and placed under the protection of the audited credit institution (its branch).

Act of verification of a credit organization

The act of checking a credit organization contains information about the main facts of its banking activities.

Based on the analysis and generalization of these facts, the working group of the Bank of Russia formulates its conclusions about the observance or, conversely, about the violation by the credit institution of federal laws, financial standards and the requirements of the regulations of the Bank of Russia. As a result, the main conclusion is made about the financial situation in a credit institution.

In accordance with the requirements of Instruction No. 34, based on the results of the audit of each credit institution (branch), an audit report is drawn up, which reflects all the main violations and shortcomings identified during the audit.

As for violations, the grounds for making a conclusion about their presence or absence are contained both in the legislation and in the regulations of the Bank of Russia.

The wording "shortcomings in the work of a credit institution" is found in various documents of the Bank of Russia, but there are no clear criteria for determining them. This is, as it were, a question of the assessment given by the working group to certain aspects of the activity of the credit organization it inspects. The term "shortcomings" is absent in the banking legislation, therefore, for shortcomings in the work of a credit institution should not be held accountable by banks.

If the audit is complex (consolidated), then in this case an audit report is drawn up, which includes the materials contained in the audit report of the parent credit institution and the audit reports of its branches. Acts of inspections of branches are submitted to the head who appointed the inspection of the parent credit organization within 10 days from the date of their signing.

In accordance with Instruction No. 34, audit reports are prepared within 30 days after completion of the audit of a given credit institution (branch), and a general report on a comprehensive (consolidated) audit of a credit institution - within 30 days after completion of the audit of its branches.

The audit reports are signed by all members of the working group, and the comprehensive (consolidated) audit report is signed by the head of the working group that carried out the audit of the parent credit institution.

The inspection report must be presented for review to the head of the credit institution (branch) whose activities were inspected. The specified manager is obliged to familiarize himself with the inspection report within 5 days and put his signature on it with the note “has read the report.” If there are objections, the head of the credit institution (branch) has the right to attach his written comments to the inspection report and before his signature make the reservation “comments are attached to ... l.”

If the head of this credit institution (branch) refused to familiarize himself with the act or to sign the act, then the head of the working group must make the following note before his signature: "the head of the credit institution (branch) refused to familiarize himself with the act (or sign ) refused.

The audit report of a credit institution (branch), including the comprehensive audit report, is the property of the Bank of Russia, and its content cannot be disclosed without the consent of the Bank of Russia, unless otherwise provided by federal law. The head of the working group is obliged to notify the head of the credit institution (branch) about this before familiarizing him with the audit report, about which the following note is made in the report before the signature of the latter: "the head of the credit institution (branch) has been warned that the audit report cannot be disclosed to third parties without consent of the Bank of Russia.

The audit report is drawn up in at least three copies. The first copy is handed over to the head of the credit institution (branch) being audited, about which the following note is made in the second and third copies of the act: "the first copy of this act was handed over (the date is indicated) to the head of the credit institution (branch)". The second copy is transferred to the manager who appointed the audit for consideration and action, and the third copy remains for accounting and control in the structural unit that was instructed to conduct this audit.

When checking a branch of a credit institution, as well as when checking carried out by a working group formed on a mixed basis, additional copies are compiled for their transfer, respectively, to the territorial office of the Bank of Russia at the location of the parent credit institution and to units whose employees were members of the mixed working group ( for the accounting).

The act of checking a credit institution (branch), signed in accordance with the established procedure, immediately, but no later than five days from the date of its signing, is transferred by the head of the working group to the head who appointed this check. The general act of a comprehensive (consolidated) audit is submitted to the head who appointed the audit of the parent credit institution.

The specified audit report is submitted together with a memorandum that briefly describes the state of affairs in the audited credit institution (branch), reports on the facts that are important for supervision purposes, but not noted in the audit report, and also provides data on the measures taken by the credit institution (branch) to eliminate identified violations and shortcomings. If the situation in the audited credit institution (branch) requires the application of the established measures of influence, the head of the working group may make proposals on the application of such measures.

The head of the Bank of Russia or its territorial branch, who has appointed this inspection, is obliged not later than within two weeks, and in the case of a comprehensive (consolidated) inspection - within a month after signing the inspection report, to consider this act and make a decision on it.

This decision is made on the basis of the opinion of the relevant division of banking supervision and taking into account the opinion of the division that conducted this audit.

Based on the results of consideration of the audit materials, a letter with an assessment of its work should be sent to the credit institution (branch), which may contain the necessary recommendations, and in established cases, instructions to eliminate the identified shortcomings.

Control over the implementation of instructions and recommendations sent to a credit institution (branch) is carried out by the banking supervision division. If necessary, a repeated inspection of this credit institution (branch) may be scheduled, which is carried out by the relevant authorized structural subdivision of the Bank of Russia or its territorial office.

Instruction No. 34 states that "employees of the Central Bank of Russia and its territorial offices who take part in inspections of credit institutions (branches), as well as familiarize themselves with the materials of inspections, bear the responsibility established by law for violations of the legal rights of credit institutions and their clients."

The draft act is being coordinated in the functional divisions. This state of affairs reduces the guarantees of the objectivity of the act and delays the verification. Intermediate links appear, which leads to bureaucratization of the entire procedure and can adversely affect not only the results of supervision, but also the position of the credit institution itself. In our opinion, draft acts should be directly sent to the head of the Bank of Russia or its territorial office who appointed the inspection.

Author: Shevchuk D.A.

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