Amendments to ease requirements for Visa, MasterCard introduced to Duma

Amendments to the Law on the National Payment Cards System that open up the opportunity to revise tougher demands applicable to international payments systems have been introduced to the State Duma, a source familiar with the text of the amendments told reporters on the on the sidelines of the St. Petersburg International Economic Forum.

Amendments to the Law on the National Payment Cards System that open up the opportunity to revise tougher demands applicable to international payments systems have been introduced to the State Duma, a source familiar with the text of the amendments told reporters on the on the sidelines of the St. Petersburg International Economic Forum.

Several Russian banks found that payment operations on the Visa and MasterCard cards they had issued were suspended after the U.S. imposed sanctions over Ukraine. St. Petersburg's Rossiya Bank was the largest bank targeted by sanctions. It was joined by a subsidiary, Sobinbank, as well as SMP Bank and InvestCapitalBank (Ufa).

The issue of creating a national payment card system took on urgency after the U.S. sanctions were imposed. The State Duma approved a bill on formation of the system at the end of April and the president signed it into law at the beginning of May. The goal of the new law is to ensure uninterrupted, efficient and accessible non-cash payment services.

In addition, the new law required that outside payment systems place an amount equal to two days' worth of their Russian turnover on deposit with the Central Bank of Russia. The deposits are to be formed gradually, with one-fourth of the average daily total paid in each quarter.

Failure to make the prescribed deposits will result in a fine equal to the shortfall. If the payment system operator unilaterally stops servicing cards, it will be fined 10 percent of the total guarantee deposit for each day of delay.

The international payment systems expressed serious concern about the tougher requirements and said they would work closely with the Russian authorities to find a solution.

The source said on the sidelines of the St. Petersburg forum that the right to set the size of the deposit and penalties might now be governed not by a law but by a bylaw or regulatory act, which either the government or the Central Bank will draft. The requirement for the size of the deposit and the penalties could be eased," the source said.

"This will be determined not by a law but by subordinate legislation," the source said.

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