GENERICO.ruEconomicsQiwi Bank's license was revoked: experts voiced the scale of the problem with electronic wallets

Qiwi Bank's license was revoked: experts voiced the scale of the problem with electronic wallets

Lawyer Gusyatnikov: “The funds in the accounts are not insured and are not subject to reimbursement.”

On February 21, the Bank of Russia prohibited Qiwi Bank from carrying out banking operations. This is the first license revocation in a year and a half. Meanwhile, the credit institution ranked 89th in the country in terms of assets. What does this mean for the industry? Can we conclude that the regulator is tightening the nuts? Will all clients of the Qiwi group of companies be reimbursed for their money losses and are there any prerequisites for further revocation of licenses? Lawyers and financial experts told MK about this.

Lawyer Gusyatnikov: “The funds in the accounts are not insured and are not subject to reimbursement

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“Qiwi Bank was in the system of the Deposit Insurance Agency (DIA), which recognized the case as insured, so there are no risks to cash balances. The set of actions is standard, as in any case of license revocation – the amounts will be returned in the amount of 100% of the remaining funds, but not more than 1.4 million rubles. Another thing is the Qiwi wallet, which is not covered by ACB insurance. It was used for money transfers, payment for services and goods, and not for storage. Therefore, most likely, customers' account balances are very low, and despite the lack of insurance, this will not cause serious losses. Thus, here wallet users bear minimal risks compared to the same deposit or storage of funds in a traditional bank.

Regarding the financial sector, the introduction of the practice of revoking licenses on the market has an extremely negative impact. There are now a large number of neobanks and payment systems in Russia. The removal of Qiwi's license is accompanied by a decrease in their attractiveness for investors, given the possibility of the Bank of Russia to abruptly suspend their operations in the Qiwi image. Undoubtedly, violations require punishment, but, in our opinion, using other methods. Such decisions pose risks for the entire banking industry as a whole. In any case, there are prerequisites for further revocation of licenses, since regulation in Russia is quite complex, and violators can always be found.”

“Will all clients of the Qiwi group of companies be compensated for the loss of money due to the deprivation of Qiwi Bank’s license? No. Only bank clients will receive compensation through the deposit insurance system. The fact is that a group of companies operates under the Qiwi brand, which includes a credit institution – Qiwi Bank JSC. It was this legal entity that was deprived of its license for violations in the field of combating money laundering, as well as for other violations of the law. However, in the Russian Federation there is another system, in addition to banking, which is regulated by another law – “On the National Payment System”. These rules affect relations on transfers, storage and other functioning of electronic funds through electronic means of payment. These means of payment include electronic wallets. There is a fundamental difference between a bank account or deposit and an electronic wallet – both legal and technical. An important point is that deposit insurance regulations apply only to relationships between banks and clients. By banks in this case we mean credit organizations that have a license specifically for banking operations. Thus, funds stored in electronic wallets are not insured. From this we can draw the following conclusions. If a bank deposit agreement has been concluded with Qiwi Bank JSC or an account has been opened, for example, a settlement or savings account, then you should not worry about the money that is included in the amount of insurance coverage. The deposit insurance system has been developed and functions well. Follow the information on the bank’s website, and also contact the Deposit Insurance Agency. But funds in electronic wallets are not insured, since this is an Internet service.”

“For the industry, this means that in addition to the clients of Qiwi Bank itself, of which there were many, clients of partners will also suffer. For example, another large bank has already warned about the problems of paying for mobile communications through the application. Numerous Qiwi terminals that people used across the country are also not working. This will also affect Qiwi shareholders – they are showing a rapid decline. But the country’s global financial sector will not suffer, since Qiwi Bank is not a systemically important bank and is not involved in the real sector of the economy. I don't think we can say that the regulator is tightening the nuts. According to the Central Bank, Qiwi Bank has repeatedly violated the laws of the Russian Federation and regulations of the Bank of Russia itself. And systematic violation of the law related to the legalization (laundering) of proceeds from crime and the financing of terrorism is a serious charge. The offer that customers sign when opening a Qiwi wallet does not contain any provisions on reimbursement or insurance. It turns out that the wallets are not insured. However, if the client had a deposit on the Qiwi platform, then these funds are insured by the DIA. However, the amount of insurance payments can be a maximum of 1.4 million rubles. If the investor had an amount exceeding 1.4 million, then he needs to go to court and thus try to seek compensation.”

“The regulator has repeatedly warned Qiwi Bank about violations, but they have not been eliminated. Now the license has been revoked, since the bank has not made any efforts to limit operations related to shadow business – the operation of online casinos, crypto exchangers, etc. So the fact that the Central Bank revoked the license for the first time in 1.5 years means one thing – there are a lot of violations, the regulator has run out of patience. Of course, the revocation of Qiwi Bank’s license affected both individuals and other market participants, since the volume of operations and the number of transactions was very large. But over time, ways will be found both to return money to investors and to restore procedures for other market participants. The Central Bank has always made it clear that it will fight attempts at illegal transactions and will increase efforts to combat money laundering. Therefore, such a step by the regulator is not “tightening the screws,” but rather reasonable actions to limit the ability to circumvent legal requirements. For many years, the Central Bank has been clearing the banking sector of participants who violate regulations: if in 2000 there were more than 1 thousand banking structures in the Russian Federation, now there are three times fewer of them. And trust in the financial system among citizens and commercial organizations is quite high. So the revocation of the license from Qiwi Bank is a good example for other structures that are still trying to violate existing laws regarding financial activities.”

“Most likely, the regulator’s decision is due to the fact that Qiwi wallets did not provide transparency. The origin of the funds was extremely difficult to trace and they could easily be used to launder the proceeds of crime. Most likely, this will become another lesson in financial literacy for the population. When placing money anywhere, it is necessary to fully study all the nuances, because insurance does not cover everything. A classic example is the now popular brokerage accounts. Banks are actively attracting the population to invest in the stock market, but the fact that funds in such accounts are not insured and are not subject to reimbursement if the financial organization loses its license is not widely advertised, as is the case with electronic wallets. The participation of the bank itself in the deposit insurance system does not guarantee that any funds will be insured. And this must be taken into account.”

“There is now huge uncertainty with Qiwi Bank, which is confirmed by the stock market – the paper has collapsed by more than 40%, and the bank has closed its offices. It’s exactly the same story with Qiwi wallets – for some they still function, for others they cannot make either incoming or outgoing payments. Considering the almost complete anonymity of the service – to receive a wallet you only needed a phone number, this decision of the Central Bank can be called logical. And the fact that the company operated throughout the CIS gave the opportunity to think that money could be sent to Ukraine through wallets. Meanwhile, it is impossible to consider this situation as a trend in the banking segment, because Qiwi Bank is a bank that was actually needed to service wallets; as such, it did not carry out large-scale work in other directions, and is 89th in terms of assets here there should be no dust in the eyes. Yes, it had a full line of other products, but still the basis was the Contact wallet and payment system. Other banks do not have such payment systems, so this is an exclusively special case.”

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