‘We understand that some banks are against it’: Central Bank wants to introduce a new limit on bank transfers ‘to yourself’

“We consider it fundamentally important that people have the right to transfer their savings freely”

As the head of the Bank of Russia said, we are talking about a free transfer limit between their accounts in different banks. According to her, the relevant bill is already under consideration by the State Duma.

“We understand that some banks are against it, but we consider it fundamentally important that people have the right to transfer their savings, at least within the insured amount, from one bank to another bank freely," she said.

Indeed, in December 2022, the State Duma adopted in the first reading a bill introduced by head of the Financial Market Committee Anatoly Aksakov and Senator Nikolay Zhuravlev. The explanatory note stated that the proposal was aimed at suppressing the possibility of banks creating protective conditions for the free movement of funds.

Nabiullina stressed that the Central Bank does not support the practice when credit institutions with the help of high fees for transfers can “lock people up within one bank, when even another bank offers more favourable conditions”.

The idea has been maturing for the third year

However, Nabiullina said that the Central Bank began discussing the idea of making transfers from its own account to its own account in another bank free of charge back in October 2021.

“Certainly, you can withdraw money in cash. Move them. But we have been living in the predominance of non-cash forms for a long time. And such commissions can often be a barrier for people to freely dispose of their money and choose those banks where deposit rates are more attractive to them," Nabiullina said.

As the head of the Central Bank noted, this initiative can improve competition among banks and strengthen the transmission of monetary policy. However, she did not specify which payment channels the decision could affect: SBP, by account details, from card to another card, and others.

It is worth noting that the amount of funds of 1,4 million was chosen for a reason. As mentioned above, these are the limits of deposit insurance. All bank deposits, accounts of individuals and small businesses are insured. So, if the bank's license is revoked, depositors receive their money within this amount.

SBP and commissions of popular banks

Let us remind that currently only up to 100 thousand rubles can be transferred free of charge per month through the Faster Payment System (SBP). If the transfer amount turns out to be higher, then it is subject to a commission, which cannot be more than 0,5% and exceed 1,5 thousand rubles. It should be noted that in March 2021 the Bank of Russia developed a strategy for the development of national payment system, according to which 25% of interbank transfers of Russians in 2023 should go through the SBP.

In November of the same 2021, the Visa payment system decided to cancel fees for transfers from card to card by phone number from April 1, 2022. However, there was also a clarification that the company would not be able to solve the issue of commissions set by the banks themselves.

As for commissions, in most of the most popular Russian banks, it ranges from 0,5 to 1,5%. So, for example, when transferring to a bank card through Sberbank Online, 1,5% of the amount transferred will be charged, but not less than 30 rubles. The same thing awaits users of Tinkoff and Russian Standard. In Alfa-Bank, the tariff can reach 1,95% with the same minimum. In VTB, such commission is 1% of the amount with a minimum of 50 rubles, in Raiffeisen Online — from 0,5-0,75%, and in Ak Bars Online — 0,3% (at least 15 rubles).

“The range of the average key rate for this year is 7,0-9,0% per annum”

In her speech, Elvira Nabiullina noted several important topics from the Russian economy and its banking sector. For example, she said that compared to the end of last year, the average monthly growth rates of prices are at a higher level. They are close to 4% in terms of a year, the head of the Central Bank stressed.

“The acceleration of price growth in January and the subsequent slowdown in February were largely determined by one-time factors. This was especially noticeable in the prices of electronics, building materials, furniture, and some food products. At the same time, the growth rate of stable components of inflation remains moderate," she noted.

She also said that the actual dynamics of GDP last year turned out to be more positive than experts' estimates. According to her, a significant factor that supported economic activity last year was government demand.

“At the beginning of this year, as shown by operational indicators, including the business climate indicator of the Bank of Russia, business activity continued to grow. We are seeing noticeable improvements in certain sectors of the manufacturing industry, construction, transport, and trade," Nabiullina explained.

Speaking about external conditions, Elvira Nabiullina said that since the February meeting they have worsened. According to her, this is due to that new restrictions for foreign trade have been imposed on the state. At the same time, as the head of the Central Bank said, the physical volumes of imports, which increased markedly in the second half of 2022, remain stable. She also said that the dynamics of inflation in general corresponds to our forecast of 5-7% for this year, economic activity is developing somewhat better.

“The range of the average key rate for this year is 7,0-9,0% per annum, we expect to return to the neutral range in 2025. We traditionally update the calculation of the neutral rate in July as part of the preparation of the Main Directions of monetary policy," she said.