On 29 October 2009, the Government adopted Resolution No. 853 on the procedure for increasing banks' capitalisation by the exchange of preferred shares for federal loan bonds. The Resolution will enter into force seven days after the date of its official publication.

The Resolution follows Federal Law No. 181-FZ "On the use of state securities of the Russian Federation for increasing banks' capitalisation," dated 18 July 2009. It sets out the procedures for a bank sending a proposal to increase its capitalisation, and for the state in deciding on this proposal.

The bank, which must satisfy certain conditions, has to submit the proposal (in the form set out in the Resolution) to the Ministry of Finance and the Central Bank. The proposal must be accompanied by a business plan and the bank's approval of a decision that bonus payments to the bank's top management will be cancelled if it fails to pay the state the dividends on the preferred shares.

Once the proposal is accepted and the share issuance is state registered, the bank must submit a signed agreement for the exchange of its preferred shares for federal loan bonds (in the form set in the Resolution) to the Ministry of Finance by no later than 10 December 2010.

On 29 October 2009 the Central Bank issued Directive No. 2313-U, decreasing the refinancing rate. The Directive entered into force on 29 October 2009.

The refinancing rate has been changed once again by the Central Bank, this time decreased from 10% (which was effective as of 30 September 2009) to 9.5% per annum. The new rate applies as of 30 October 2009.

The Central Bank sets the refinancing rate for its financing of commercial banks. The rate is also used for calculating interest on commercial loans (if the rate is not specified in an agreement), tax payments and in other cases provided by law.

On 21 October 2009, the State Duma adopted, in the first reading, Draft Laws:

Draft Law No. 249606-5. This seeks to establish a legal framework for the securitisation of financial assets in the Russian market. In particular, it introduces the concept of a special financial entity which is established to attract financing through the issue of bonds secured by a pledge of monetary claims and (or) securities. It amends rules regulating agreements on financing under the condition of assignment of monetary claims (such agreements are to be used for the acquisition of monetary claims by the special financial entity) and also sets a basis for the "true sale" of monetary claims.

Draft Law No. 249609-5. This seeks to establish an effective mechanism for securing financial obligations (that is, obligations related to securities or obligations to which a financial organisation is a party), including a mechanism for securitisation purposes. It sets out detailed regulations on the pledge of claims under monetary obligations (including future obligations) and the pledge of rights under a bank account (deposit).

The Draft Laws will apply if adopted by the State Duma in three readings, approved by the Federation Council, signed by the President, and officially published.