First new bank in four years launched in Russia

First new bank in four years launched in Russia Photo: gov.ru

In the past few years, a severe banking industry clean-up performed by the Bank of Russia has entailed a dramatic decrease in the number of Russian banks. However, a new banking institution – the first one in four years – received a licence last week.

A new digital bank focused on Russian internet and e-commerce companies announced receiving a banking licence from authorities, reports Finextra. The fintech enterprise named Bank 131 is a project of Dmitry Yeremeyev, the founder of FIX Group of Companies, while the bank's top management comes from Yandex.Money.

Yeremeyev's project is designed to become a fintech platform for global internet companies working in Russia and employing Russian contractors. ''Russia is known for its talent, especially in IT and mathematics. Many of our citizens work for global internet companies, but it is not always easy to coordinate local and global business processes, including digital contractors who receive payment for their work,'' says the bank's founder. He considers that such people badly need compliant and quality fintech products and aims to provide them.

Bank 131 is going to use the newest fintech solutions that combine the payment gateway and payout model. Photo: pixabay.com

The businessman is seeking to fill a niche that is not occupied by traditional banks, as they build their business models on retail crediting and offline business. Yeremeyev estimates this market at around $8 billion and notes that it is not fully visible to authorities and not transparent to all parties involved. Bank 131 is going to use the newest fintech solutions that combine the payment gateway and payout model instead of using traditional business models, such as offline branches and ATM machines. Later, these solutions can be extended to other markets.

Meanwhile, Bank 131 is the only new bank that has received a banking licence in four years. ''We are delighted to receive the first banking licence in years,'' says Yeremeyev. He points out that the Russian banking industry is facing aggressive ''industry cleansing'' policies employed by the Central Bank of Russia. As a result, the number of Russian banks has decreased by almost half in just a few years.

Russian authorities are currently working to strengthen controls over foreign payment systems servicing Russian citizens. The new bank is going to provide full compliance of its financial instruments with these developing regulations.

By Anna Litvina