Bank of Russia requires universal-licence banks to adopt a finalised risk-sensitive capital adequacy ratio approach from 18 August 2025

The Bank of Russia issued new rules for calculating capital adequacy ratios under Instructions No. 220-I and No. 221-I, effective 18 August 2025. Banks with a universal licence must transition to a finalised, more risk-sensitive approach, while banks with a basic licence and non-bank credit institutions will continue to use the standard approach. Key changes include refined criteria for classifying borrowers as investment grade, introducing a minimum credit rating of ‘A’ and applying lower risk weights to that category. Risk weights for loans to constituent entities and municipalities will be differentiated based on ratings from Russian credit rating agencies or, if unavailable, on debt sustainability assessments by the Russian Ministry of Finance, with a full transition to credit ratings planned for the future. Mortgage risk weights for housing under construction will be aligned with those for existing housing calibrated on default statistics, a unified multiplicative approach will apply to macroprudential add-ons across internal ratings-based and other banks, and additional measures will target credit concentration, including repo risk assessment based on the issuer of collateral securities when a borrower’s rating is below ‘AA’ and allowing concentration risk to be transferred from borrowers to reliable guarantors, sureties, or collateral security issuers. To facilitate implementation, a number of the new rules will apply only to loans originated after 18 August 2025.