Foreign banks will be allowed to set up their branches in the Russian Federation, a shift from the current regulation which permits only subsidiary banks or representative offices. The draft law outlining the procedure for establishing branches was adopted by the State Duma in its second reading on July 30.
These branches will be authorized to open and service bank accounts for legal entities; transfer funds on behalf of legal entities, including correspondent banks; collect cash, promissory notes, payment and settlement documents; and provide cash services to legal entities. Additionally, they will be able to issue guarantees and sureties, lease special premises, safety deposit boxes for storing documents and valuables, conduct leasing transactions, and provide advisory and information services.
The Bank of Russia will supervise the operations of foreign banks' branches. The law is set to take effect on September 1, 2024.
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