Russia’s Finance Ministry is lobbying for amending Russian laws on banking, on the Bank of Russia, and on currency regulation and control to ban new foreign bank branches in Russia.

The draft published on the Ministry’s web-site proposes excluding foreign bank branches from the Russian banking system.

At this point, the law allows foreign bank subsidiaries, branches, and representative offices to operate in Russia, the Ministry said in a letter accompanying the proposal. However, there are no branches of foreign banks now due to the Russian government’s attitude reflected in its banking sector development strategies.

Unlike subsidiaries, foreign bank branches operate outside Russia’s jurisdiction and hence are not fully subject to oversight by Russian regulators. They are not required to make deductions to Russia’s reserve funds or to submit their statements based on international or Russian accounting standards to the Central Bank.

Russia’s position concerning foreign bank branches is reflected in its final WTO accession documents. The plan is to reconsider this issue at the upcoming negotiations on Russia’s entry into the OECD.