Examining DIS member banks

Sign of bank membership in DIS One million "Depositor's Guide" booklets were placed in DIS member - bank's offices

In 2006, the staff of the Agency participated in 151 inspections held by the Bank of Russia in DIS member-banks to verify compliance with the Law on deposit insurance. The inspections were held in banks located in 52 regions of all the federal districts of the Russian Federation. The total amount of deposits in the inspected banks comprised close to 32% of all deposits (excluding Sberbank of Russia).

The inspections revealed that the banks mostly comply with the requirements of the Law on deposit insurance. Compared to 2005, the banks showed certain improvements in accounting of bank liabilities to depositors and in internal procedures promoting the compliance with the requirements of the Law. For the first time there were banks, which faced no claims after the inspections.

In practically all the inspected banks the funds of private individuals attracted on the basis of a bank deposit agreement (account) were fully accounted for as subject for insurance. Errors in accounting of insurable deposits of private individuals or cases of incorrect exclusion of such deposits from the reimbursement calculation base were few and insignificant in amounts.

All the inspected banks, as a rule, follow the recommendations of the Agency regarding notifications of depositors about participation in the DIS system and on the procedure for recieving deposit reimbursement..

A test register of liabilities to depositors was formed in 130 banks, including 52 banks, which submitted their registers for verification on their own initiative.

Most banks have adopted internal documents defining the rules for compiling the register and developed the necessary software. Out of 130 banks with test registers, six banks formed a register, which fully complied with the Instructions of the Bank of Russia #1417U. An overwhelming majority of banks (85% of all the banks with a test register) formed a register, which generally met the requirements of the above-mentioned document. Most of the banks carried out preparatory work to specify and unify the accounting data of their clients, specifically of the “old” agreements concluded before joining the DIS system. Drawbacks exposed by the costs and changes in the existing accounting system, and have no critical significance for settlement of depositors’ claims.

In 13 banks (10% of all the banks with a test register) the registered liabilities data at the time of the check did not correspond to the balance sheet data, up to 70% of register entries contained no information on depositors’ identification documents and address or did not allow to identify the depositor, and entries on one depositor were included several times into the register, which distorted the correct calculation of the insurance indemnification amount.

The listed drawbacks were mostly caused by data storage technology on depositors and liabilities, which did not meet the new requirements after the bank joined the DIS system, by imperfect internal procedures for compiling the register, including the absence of internal regulations and insufficiently streamlined software (before the inspections several banks did not have any software for controlling the liabilities register designed by the Agency and posted for free use on the Agency’s web site). Generalized information about the results of the inspections has been submitted to the Bank of Russia, banking associations and posted on the Agency’s web site.