Russian Bankers Want Financial Ombudsman Institute

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Jun. 16 – Bankers in Russia have suggested establishing an institute for financial ombudsman in Russia and allocating it with the functions of bank borrowers’ interest protection, said the vice-president of the Association of Regional Banks of Russia Oleg Ivanov to RIA Novosti.

The institute could be established in the body of the Central Bank, or as the independent organization which will operate on bank’s means.

“Banks can be interested in this organization because it will allow them to save on legal expenses put up by banks during proceedings with clients,” said Ivanov. “For the first time the financial ombudsman office will investigate cases on the size of the potential claim from 50 000 to 100 000 rubles in before the court proceeding stage.”

According to Ivanov, 90 percent of all cases between banks and their clients in Russia are in the sphere of consumer crediting. The financial ombudsman could consider the majority of these cases as well as cases related to bank deposits, securities and assets management.

“In the perspective of the coming three years it would be possible to expect that the majority of the banks providing loans in the retail sphere will support the new institute,” said Ivanov.

At the same time some experts doubt the projected efficiency of the ombudsman institute due to financial ignorance of the majority of the Russian population.

“Russia needs a special federal education program in whose framework schooling for all strata’s of the population, from training of journalists to classes for pupil and lectures for pensioners, will be carried out,” said the observer of Russian daily Rossiskaya gazeta Vladimir Mitarev.

According to the World Bank data, more than 40 percent of the Russian population has no access to financial services, only 16 percent of citizens have bank accounts and less than 1 percent invests their money in shares and bonds.

Mitarev thinks Russia should use the Kazakhstan experience where a national financial literacy development program began in 2007 has already seen some positive results.

“For example, the financial educational program on pension reform has led to disappearance of co-called “silence-keepers”, i.e. those who have decided not to respond to a question which company – state owned or private – they would prefer to operate their pension funds,” Mitarev explains.

According to statistical data, the number of Russian “silence-keepers” continues to remain at catastrophically high level, less than 10 percent of citizens were decided on whom they could entrust their pensions.

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