Banking organizations are required to create reserves that provide compensation in monetary terms for operating risks. One of the main risks is the possibility of non-repayment of issued loans. To evenly transfer possible financial losses to operating results, it is necessary to form a reserve for loan losses. It is formed in an amount that is calculated on the basis of the standards of the Central Bank of the Russian Federation.
Provision for possible loan losses
The reserve is created to smooth out the negative impact of situations with depreciation of issued loan funds. This can happen under the influence of external factors and due to the debtor’s failure to return money. Thanks to the reserve, significant fluctuations in profitability are prevented. The formation of the reserve fund is carried out through regular deductions, which are recorded as expenses. Regulation of the issues of reserving money for probable non-repayment of loans falls within the scope of the Central Bank Regulation dated June 28, 2017 No. 590-P.
IMPORTANT! The assessment of issued loans and their distribution by quality categories is carried out by banks independently. The amount of potential losses included in the reserve is determined by the amount of possible depreciation of credit resources.
The amount of probable losses is equal to the difference between the book value of the loan (the outstanding balance of the debt) and the fair estimated value. Reserves can be created separately for each loan or in relation to a set of homogeneous loan obligations. The loan is assessed according to its quality level regularly from the moment the loan money is issued to the client.
REMEMBER! Conditions such as the financial position of the debtor and the dynamics of its changes, the good faith shown by the borrower in fulfilling obligations to repay the loan are used as evaluation criteria for loans.
Formation of reserve
When calculating the total volume of reserve funds, banking organizations take into account categories of loans. According to the quality standards of the Central Bank of the Russian Federation, there are five of them:
- For the first category of loans, reserve contributions are 0%. These are standard loans classified as the highest quality category. There is no obvious credit risk for them.
- The second group is characterized by regular enrollment of up to 20% of debts to the bank into the reserve fund. These are non-standard customer credit obligations that are assigned a moderate level of impairment risk.
- For debts of the third category, deductions amount to 21-50% of the volume of such loans. This is a portfolio formed by doubtful debts. The likelihood of material damage occurring during their maintenance is high.
- The fourth group includes debts whose repayment is doubtful. For them, reserves are created in the amount of 51-100%. Such problem loans have a high risk of non-repayment or late payments.
- The fifth category consists of bad debts, for which provisions are equal to the amount of credit funds.
NOTE! The amount of the reserve directly depends on the quality of loans.
The Central Bank recommends considering loans from 2-5 categories as sources of risk. They are called partially or fully impaired. Reserve fund resources are credited to an open interest-free account. This account is interest-free, its purpose is to accumulate funds and ensure their safety.
The formation of reserve funds is carried out in national currency. The reserve system must be applied by all banks issuing loans (regardless of the currency of the loan). When implementing guarantee deductions, it is recommended to first classify loans and compose homogeneous loan portfolios from them. The distribution of loans among portfolios is carried out according to several criteria:
- debts of individuals, legal entities and individual entrepreneurs are shown separately;
- loans are divided into groups of secured and unsecured;
- An additional division is made according to the degree of discipline of the debtors.
A professional value judgment is made on the basis of measures for a comprehensive analysis of the debtor’s activities and his financial situation. The completed results must contain the following information:
- about the existing level of risk of client insolvency;
- about the analytical procedures performed and the methodology used;
- to assess the quality of loan servicing;
- provision estimates for a specific debt.
For legal entities, accounting documentation, tax returns, reporting, and the content of statistical forms serve as a source of information for analyzing solvency.
NOTE! The procedure for forming a reserve fund and the methodology for assessing the solvency of borrowers must be prescribed in the bank’s internal documents.
Accounting and tax accounting
In situations where the calculated value of the reserve fund turns out to be less than the volume of deductions actually made to the reserve, the difference in values is allocated and transferred to income items of activity. During the next operation to assess the risk level of a loan, the loan category may be changed. In this case, the debt is reclassified. It is the basis for additional accrual of the reserve or reduction in its size. An alternative way is to write off the entire amount of the reserve fund for a specific debt to the bank’s income and create a guarantee reserve of money in an updated amount.
FOR YOUR INFORMATION! The method of reflecting adjustments to the amount of reserves must be fixed in the local documents of the financial institution.
In reporting forms, banking structures must disclose information about new loans issued, the facts of writing off bad debts, the level of repayment of existing obligations by clients, and cases of loan reclassification. The size of reserve funds is determined for the bank as a whole, including the resources of branch divisions.
Displaying information on reserves for loans in accounting is carried out according to the rules approved by the Regulations dated February 27, 2017 under No. 579-P. The chart of accounts provides several sub-accounts for systematizing data on reserve funds. The movement on these accounts is carried out by a set of operations to accrue, increase reserves, restore previously deposited amounts into them, with subsequent assignment to income items.
Accounts that systematize data on reserves for possible loan losses belong to the passive group. The process of reserve formation is displayed using credit turnover, debit movement shows a decrease in the created fund due to a reassessment of the quality of loans or writing off bad debts. Using analytical accounting, banks create an information base on reserves formed for each client and broken down into contracts or portfolios of homogeneous obligations.
Art. 297.3 of the Tax Code of the Russian Federation regulates the issues of tax accounting for this type of reserves of credit structures. Deductions made are recorded as expenses of the organization. These costs are recognized as part of . Once a recognized bad debt is written off from the balance sheet, interest on the loan stops accruing. If the amount of reserved funds at the end of the tax period was not used by the bank in full, then the balance is carried over to the next year. The size of the new reserve should be adjusted to the balances of previous years, which may be part of the current reserve funds.
Typical wiring
The formation of the reserve is reflected in correspondence with the debiting of the cost account and crediting the sub-account allocated for reserve funds:
- D70606 – K32015 (32115, 32505, 32211, etc.)– when reserving resources for possible losses on loans issued to other credit organizations;
- D70606 – K44115– reserve for loans provided to government agencies and extra-budgetary funds;
- D70606 – K45215– creation of a reserve for loans to legal entities;
- D70606 – K45415– reserves to cover possible losses due to depreciation of loans issued to individual entrepreneurs;
- D70606 – K45515– reserving funds for the obligations of clients from the category of individuals.
Provided that the loan is repaid by the debtor, reserve resources lose their relevance. They must be restored to income. This is done by posting between the debit of the reserve subaccount and the credit of account 70601.
Formation of reserves for possible loan losses The bank performs in accordance with the regulations of the Central Bank of the Russian Federation. The main purpose of creating these reserves is to compensate for the risks of non-repayment of loans. In turn, reserving ensures, on the one hand, equal attribution of possible loan losses to the financial result, and on the other hand, it creates stable conditions for the bank’s activities. We will talk about the nuances of forming bank reserves in this material.
Five categories of bank loan quality
As noted above, the creation of a reserve for non-repayment of issued loans (credits) and similar payments is a mandatory action for any bank in Russia carrying out lending operations. The main regulatory document in this area is the Regulation of the Central Bank of the Russian Federation on the procedure for forming reserves for possible losses on loans by credit institutions dated March 26, 2004 No. 254-P (hereinafter referred to as Regulation No. 254-P).
IMPORTANT! Regulation No. 254-P regarding the risk assessment of loan debt is applied today, taking into account the Directive of the Bank of Russia dated 06/03/2010 No. 2459-U (hereinafter referred to as Directive No. 2459-U).
According to the specified standards, to determine the amount of the reserve, it is necessary to analyze the existing loan portfolio and classify issued loans according to the quality criteria specified by the Central Bank.
All loans are thus divided into 5 categories, depending on their inherent criteria. Each category is assigned one or another risk level:
The assessment is made based on the professional judgment of a banking specialist. The main evaluation criteria are:
- the financial position of the borrower (and changes in this position);
- conscientiousness of the borrower's servicing of his debts.
The specialist’s conclusions follow approximately the following logic:
For the purposes of analysis and reserve formation, you can combine loans that are insignificant in amount but similar in criteria into a group - a portfolio of homogeneous loans. In this case, calculations can be made based on the portfolio.
As you can see, the process of forming estimated values of loan reserves in terms of assessing risks and the amount of the reserve is similar to the process of forming insurance reserves. The assessment procedure and the values of risks and reserves recommended by the Central Bank are also determined on the basis of statistical and mathematical methods.
You will learn more about the formation of insurance reserves from the article.
The procedure for banks to apply the provisions of the Central Bank of the Russian Federation on the creation of a reserve for loans
First of all, you should always remember that the process is permanent: yesterday’s reserve value is constantly updated and adjusted for the current day. This is due to the fact that the main criteria taken into account are constantly changing:
- existing loans are repaid and new loans are issued;
- the situation of borrowers changes, as a result of which they move from one category to another.
For the same reasons, the applied reserve rate is also subject to adjustment. It can be updated less frequently—once a quarter.
The process of forming and clarifying reserves is subject to several basic rules (Chapter 4 of Regulation No. 254-P):
- If the same borrower has several debts on credit products and different quality ratings are obtained for them, all debts must be assessed at the lowest of the values.
Example
The borrower has two loans that are repaid on time, which were classified as “good-good” (see assessment table). The borrower took out another loan, and from the information he provided it is clear that his financial situation has worsened somewhat. Thus, a new loan should be assessed as “good-average” and categorized as “non-standard” with a probability of non-repayment of 0.01-0.2 and the creation of a reserve. And after the third loan, both existing ones must be moved to “non-standard” and a reserve must be created for them (despite the fact that until now the borrower has repaid them without problems).
- When providing bank guarantees, if there are amounts not collected from the principal (debtor), the same rules and approaches are applied to the assessment of the principal as for ordinary bank borrowers. Accordingly, in case of risks, a reserve is formed.
- When assessing the risk of loans secured by mortgages, the assessment criteria are supplemented by an analysis of the possible change in the value of the collateral.
- For transactions with financial assets for which deferred payments (or transfer of assets) are provided, additional reserves are formed to cover the cost of this financial asset.
- If the loan is syndicated (there are actually several borrowers for one loan), the reserve is calculated for each syndicate participant, in accordance with the rules set forth in Bank of Russia Instruction No. 139-I dated December 3, 2012.
- If financing of a bank client is carried out under the assignment of a monetary claim, then:
- before the actual transfer of the claim, the bank assesses the risks (and creates reserves) in relation to the client;
- after the fact of the assignment, the bank begins to similarly shortchange the debtor.
- The presence of insurance - life, health, disability, etc. - may or may not be considered as a fact influencing the assessment of the reserve. The criterion for judgment here will be what amount of insurance compensation will be due to the bank and how much it covers the amount that the borrower requires for further debt service. If the insurance amount due to the bank does not cover the borrower's debt, it is not advisable to consider the presence of insurance as a factor for reducing the reserve.
- By default, the fifth (worst) category includes loans:
- for which the bank does not have documents confirming the loan relationship;
- issued to credit institutions that have lost their license.
Let us remind you that for category V loans a reserve is formed in the amount of 100% of the debt.
Nuances of forming reserves for portfolios
Most of the nuances are related to borrowers - individuals.
To properly form reserves, individuals should be divided into:
- “just” individuals;
- entrepreneurs.
Loans issued to individuals are classified into:
- secured (by mortgage of real estate, car, other valuable property);
- unsecured (respectively, for which there is no security).
Well, of course, loans can be repaid on time (without delays) and not repaid on time (with delays).
Based on the three criteria outlined, portfolios of homogeneous loans are formed for cases where the reserve can be formed as a whole for the portfolio (not separately for each loan).
The established amounts of contributions to reserves are given in tables 3, 3.1, 3.2, 4, 4.1 of Regulation No. 254-P. A choice of three options is allowed for “simply” individuals and two options for entrepreneurs.
The criteria for choosing one or another standard for creating a reserve are:
- the procedure for classifying mortgages used by the bank (for example, the bank may or may not allocate mortgage loans with a reduced level of risks when forming portfolios);
- the procedure used by the bank for combining loans into portfolios (for example, the bank can allocate loans with minor overdue payments (up to 30 days) into a separate group, or can combine them into one group with loans without overdue payments).
Procedure applied by the bank formation of reserves for possible loan losses must be enshrined in local regulations, and must also be disclosed in the reporting submitted by the bank.
Typical entries for the formation of reserves for loans
Postings in credit institutions are formed on the basis of the chart of accounts approved by Bank of Russia Regulation No. 385-P dated July 16, 2012. According to this plan, provision for loan losses occurs on the credit of a subaccount opened in the same account in which the loan itself is recorded. At the same time, analytics in the context of loan types is provided by using one or another account from the chart of accounts. The bank expense account is debited. That is, from a technical point of view, the formed reserve reduces the amount of doubtful debt on the balance sheet, evenly over time attributing the difference to the financial result.
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Account number (code) |
Subaccounts |
Note |
|
|
70606 "Expenses" |
320, 321, 322,… 325 |
32015, 32115, 32211, … 32505 |
The coding of accounts intended for accounting for transactions with other credit institutions begins with 32. For each loan account, the plan of bank accounts provides a sub-account for the formation of reserves for these loans |
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From 44 begins the coding of accounts that reflect lending operations to government agencies and structures of extra-budgetary funds of the Russian Federation. Account numbers of credited legal entities (organizations) begin with 45 |
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Account, subaccount for accounting for reserves for individual entrepreneurs |
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Account, sub-account for accounting for reserves for loans to individuals |
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If the loan for which the reserve was created is paid, the reverse entry is made through account 70601 (Revenue):
Dt Sub-account of the formed reserve / personal account of the borrower - Kt 70601.
You will learn about accounting for other financial organizations from the material.
Results
Provisions for possible loan losses must be made by banks to ensure that loan losses are evenly expensed and as part of the procedures for assessing the risks of loan default and managing these risks.
Loan obligations to a credit institution or the existence of a real threat of such non-fulfillment (improper fulfillment) (hereinafter referred to as credit risk for the loan).
When issuing a loan, there is always the possibility of non-payment, that is, the bank cannot unambiguously determine at the time of conclusion of the transaction and during the loan support the fact of repayment of the debt on time and in full. Therefore, by creating a reserve, the bank introduces the risk of non-repayment (the so-called “credit risk”). Thus, this reserve ensures the creation of more stable conditions for the bank’s financial activities, allowing it to avoid fluctuations in the amount of profit associated with the write-off of loan losses. The source of the reserve is deductions attributed to bank expenses. That is, in accounting, the creation of reserves is reflected as bank expenses, and restoration, due to the repayment of loans or due to a decrease in the reserve rate, is reflected as bank income.
The reserve is formed:
- for each loan in the event that the loan has individual signs of impairment (as a rule, these are loans issued not under the terms of the bank’s lending programs, that is, having distinctive features in the amount, term, rate, collateral compared to other loans);
- for a portfolio of homogeneous loans (HLO), that is, for a group of loans that are insignificant in amount and have common characteristics.
The amount of the estimated reserve
To determine the size of the estimated reserve in accordance with the regulations of the Central Bank of the Russian Federation, loans are divided into quality categories.
In the case of assessing an individual loan product, determining the category of loan quality, i.e. the probability of its impairment is carried out on the basis of professional judgment using a combination of two criteria, “financial position” and “quality of debt service”. According to the table, all loans are divided into five quality categories:
In accordance with Regulation No. 254-P dated March 26, 2004, the risk rate is determined according to the following table:
Loans consolidated in the PIC, depending on the length of overdue payments, are grouped into one of the following portfolios of secured (mortgage and vehicle loans) and other loans:
- portfolio of loans without overdue payments;
- lasting from 1 to 30 calendar days;
- a portfolio of loans with overdue payments lasting from 31 to 90 calendar days;
- a portfolio of loans with overdue payments lasting from 91 to 180 calendar days;
- portfolio of loans with overdue payments lasting more than 180 calendar days.
Regulation No. 254-P dated March 26, 2004 provides for two options for determining the minimum reserve rate for a portfolio of similar loans provided to individuals, at the discretion of the credit institution. The bank must confirm the chosen option in its credit policy.
For small and medium-sized businesses, there is a single method for determining the risk rate, which coincides with option 1, proposed for individuals.
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Frequency of formation
The amount of the reserve for possible loan losses is adjusted by the bank daily in accordance with changes in the size and quality of the loan portfolio, that is, in connection with the issuance (repayment) of loans, the transition from one quality category to another, and changes in the risk rate for individual loans.
The reserve rate is determined by the bank at least once a quarter based on professional judgment on individual loans and portfolios of similar loans.
Notes
Links
- Regulations of the Central Bank of the Russian Federation No. 254-P dated March 26, 2004 “On the procedure for the formation by credit institutions of reserves for possible losses on loans, on loan and equivalent debt.” Consultant Plus. Archived from the original on May 27, 2012. Retrieved September 26, 2011.
- A.V. Belyakov Reserves for possible losses - economic essence and accounting for tax purposes. Archived from the original on April 12, 2012. Retrieved February 27, 2010.
- A.A. Kurnosenko Features of legal regulation of banking risks in a market economy // Banking Law. - 2008. - V. 5.
- O.S. Pogorelova Problems of forecasting credit risks // Bank lending. - 2008. - V. 3.
- A.A.Slutsky The concept of determining the value of the minimum reserve for loans // Bank lending. - 2008. - V. 4.
- A.V. Sukhov Credit risk management in Russia and Europe: comparative analysis // Management in a credit institution. - 2008. - V. 6.
Wikimedia Foundation. 2010.
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Provisions for possible loan losses are formed by a credit institution in the event of possible loan impairment due to non-fulfillment or improper fulfillment by the borrower of its obligations. By creating a reserve, the bank introduces the risk of non-repayment. The reserve provides the credit organization with more stable conditions for financial activity and allows it to avoid fluctuations in the amount of profit associated with the write-off of loan losses. Reserves are formed from deductions that the bank applies to expenses. In accounting, the creation of reserves is reflected as bank expenses.
The amount of reserves depends on the quality of loans, which are divided into five categories in accordance with regulations of the Central Bank of the Russian Federation. For loans of the first quality category, the bank creates 0% of reserves, the second - up to 20% of the principal amount, the third - from 21% to 50%, the fourth - from 51% to 100%, the fifth (bad loans) - all 100%. The bank classifies loans and assigns them to one or another quality category based on risk assessment.
Reserve requirements for the liabilities of commercial banks are applied to regulate the overall liquidity of the banking system and are one of the main instruments of monetary regulation.
The bank's required reserves represent part of the credit resources contained in an interest-free account opened with the Central Bank. The credit institution is obliged to create these reserve funds in order to ensure financial reliability.
Reserve policy is part of the monetary policy of the Central Bank, which is established to control monetary aggregates by reducing the money multiplier and maintaining the money supply in circulation at a certain level.
The essence of bank reserve requirements
In accordance with the law, a banking institution is obliged to classify assets, highlighting doubtful and bad debts, and create reserves in the manner established by the Central Bank to cover possible losses, possible losses on loans, foreign exchange, interest and others and guarantee the return of deposits. The obligation to fulfill reserve requirements arises for a credit institution from the moment it receives a license to carry out banking operations.
Types of bank reserves
Bank reserve requirements are a tool for controlling cash flows by reducing cash accumulation by commercial banks. A similar mechanism is established in order to limit the lending capabilities of financial organizations.
The bank's required reserves are kept at the Central Bank as a financial guarantee fund that ensures the reliable fulfillment of its obligations to clients. These highly liquid assets cannot be used if the bank encounters unfavorable circumstances.
The bank's reserve fund is part of its own capital formed through the increase in net assets. The reserve fund serves to cover the bank's losses arising as a result of its activities, as well as to increase the authorized capital. At the end of the year, the bank can make contributions to the reserve fund only if there is a profit.
Reserves for possible losses
The formation of a bank reserve is done in order to avoid the following risks:
Failure to fulfill obligations on the part of the bank's counterparties regarding operations or concluded transactions;
decrease in the value of banking assets;
an increase in the volume of bank liabilities/expenses compared to previous periods.
Provision for possible loan losses
The reserve is formed in the event of loan depreciation due to the borrower’s failure to fulfill financial obligations or the existence of a real threat of such failure. The reserve is formed for a specific transaction or for a group of loans with similar credit risk characteristics (loan portfolio). See below for more details.
Other bank reserves
In addition to the bank’s main reserves, there are others to prevent possible losses on other assets:
The bank's reserve for balance sheet assets for which there is a risk of loss;
- reserve for instruments reflected in off-balance sheet accounts;
- reserve for futures transactions;
- bank reserve for other losses.
In fact, of all the listed bank reserves, only the reserve fund is effective - through this fund, the bank can influence its expenses. An increase in all other reserves does not affect financial stability, and therefore is not as effective.
Provisions for possible loan losses
Reserves for possible loan losses are a fund of money formed by a commercial bank to cover the risks of active operations, in particular credit transactions. Possible risks mean loan depreciation due to the borrower’s failure to fulfill or improper fulfillment of its obligations. The formation of a reserve provides the bank with more stable conditions for financial activity and allows it to avoid fluctuations in the amount of profit associated with writing off loan losses. Provisions for loan losses are made up of expense allocations.
Definition of loans
Loans mean not only lending transactions, but also the following transactions with financial instruments, from which monetary claims arise:
Granted loans, including interbank loans, other placed funds, including requirements for receipt (return) of debt securities provided under the loan agreement.
Amounts paid by a credit institution under bank guarantees, but not collected.
Cash requirements for factoring transactions.
The rights of claim acquired under the transaction (assignment of claim).
Requirements for purchased mortgages.
Banking requirements for transactions with financial assets with deferred payment.
Requirements for payers for paid .
Requirements of a credit institution as a lessor for financial lease (leasing) operations.
The procedure for forming a reserve for possible loan losses
After the underwriting procedure and loan issuance, the assessment of the borrower does not stop. To determine the size of the required reserve, the quality of the loan is assessed, which, in accordance with the regulations of the Central Bank, is divided into five quality categories.
Category II - based on a professional judgment about the level of risk, the existence of a moderate potential threat of loss is determined (for example, unfavorable developments of the situation in the markets in which the borrower operates are predicted).
Category IV - the presence of potential and moderate real threats, or the existence of real threats of partial losses (for example, the borrower does not fulfill its obligations to timely repay interest and principal on the loan), has been identified.
Depending on a reasonable assessment of the real possibility of damages and losses, the bank transfers the loan to the appropriate quality category with the accrual of reserves in the following proportions:
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Classification |
26. The procedure for creating a reserve for possible loan losses (rvps).
The loan loss reserve (LOPL) is a special reserve, the need for the formation of which is due to credit risks in the activities of banks. It provides banks with the creation of more stable conditions for financial activity and allows them to avoid fluctuations in banks' profits due to the write-off of loan losses. Source education RVPS- deductions attributed to bank expenses. If the loan is fully repaid by the borrower, RVGIS is disbanded, and its amount is sent to the bank’s income. Purpose of RVPS- covering the principal debt outstanding by clients (banks). This reserve is used to write off losses on uncollectible bank loans. A loan debt for which the measures taken for collection are complete (including the sale of collateral) and indicates the impossibility of taking further actions to repay the loan is considered unrealistic for collection. Depending on the amount of credit risk, loans are divided into four groups:
1) standard (virtually risk-free loans) - the amount of deductions from the amount of the principal Debt 1% ;
2) non-standard (moderate level of risk of non-refund) - the amount of deductions is 20%;
3) doubtful (high level of risk) - the amount of deductions is 50%;
4) hopeless (the probability of repayment is practically absent, the loan represents the actual loss of the bank) - the amount of deductions is 100%; The reserve for possible loan losses is formed at the time the loan is issued in the currency of the Russian Federation - in rubles. The total amount of the reserve (account balances for accounting for the reserve for possible loan losses) must be updated (regulated) monthly depending on the amount of actual loan debt, including taking into account changes in the amount of the principal debt when the ruble exchange rate changes against foreign currencies on the date regulation, and on the risk group to which a particular loan (bill discounted by the bank) is assigned.
27. The procedure for using the reserve for possible loan losses and the responsibility of banks for the correctness of its formation.
Reserves for possible loan losses (RLLP) are used only to cover outstanding loan debt by clients (banks) on the principal debt, and on bills of exchange - for the bill amount minus the discount percentage. A debt that is bad or deemed uncollectible is written off from the bank’s balance sheet through the reserve for possible loan losses by decision of the bank’s board of directors or supervisory board. The grounds for writing off loan debt may be: 1) definitions judges on termination of enforcement proceedings to collect debt from the debtor (guarantor or surety) in favor of the creditor; 2) the order of the bailiff to return the writ of execution; 3) decisions of the arbitration court on the forced liquidation of the debtor enterprise (recognizing the enterprise as insolvent, i.e. bankrupt), as well as in the case of voluntary liquidation of the debtor enterprise; 4) a court decision recognizing the debtor citizen as missing; 5) a court decision to declare a citizen dead; 6) other documents confirming the impossibility of the debtor to repay overdue loans, provided for by current legislation. The Bank, in the course of prudential supervision, including based on the results of an audit, has the right to make a demand to the bank to re-evaluate loan debt based on the results of the assessment of the bank’s loan portfolio - to additionally accrue a reserve for loan debt or to reduce the amount of the actually created reserve. If the supervisory authorities of the Bank of Russia identify an unreasonable underestimation by credit institutions of the quality of the loan portfolio and, as a result, a decrease in the taxable base, the Bank of Russia is obliged to present a requirement to reassess the quality of assets, make changes to the calculation of the reserve for possible loan losses and transfer additional funds to the budget. Penalties are provided for violations of the requirements for the creation of RVPS:
1) For the creation of a RVPS in the amount of less than 100, but not less than 80% of the required values - a fine of up to 0.05% of the minimum authorized capital.
2) For the creation of a RVPS in the amount of less than 80% of the required amount - a fine in the amount of 0.05 to 0.1% of the minimum authorized capital.
3) Violations in the classification of loans that led to the formation of RVPS in an amount that does not comply with the requirements of the Bank of Russia - a fine in the amount of 01% of the minimum authorized capital