The new cooperation will support Union Bank`s strategy to generate sustainable growth and enable it to provide more lending to SMEs in order to meet both the increased financing needs of its selected clients and control their risk-weighted assets. As of 1 September 2017, the Bank of Russia also provides loans under the Emergency Liquidity Assistance Facility (ELA). This facility is made available to banks facing a temporary liquidity shortage when other sources of credit, including the Monetary Policy Instruments of the Bank of Russia, are exhausted. Financing under ELA is provided in rubles for no more than 90 days. In this case, the interest rate corresponds to the key rate in force at the time the credit was granted, increased by 1.75 percentage points. These loans offer a wider range of eligible guarantees than loans granted under monetary policy. In order to help systemically important credit institutions to meet the liquidity ratio, the Bank of Russia has set up a credit facility under irrevocable credit lines. This facility grants loans under irrevocable credit line agreements at the interest rate corresponding to the policy rate plus 1,75 percentage points. In order to manage the risks associated with credit operations, the Bank of Russia applies adjustment ratios set for both eligible securities and private debt.
Risk participation agreements are often used in international trade, but these agreements are risky since the participant does not have a contractual relationship with the borrower. On the other hand, these transactions can help banks generate revenue streams and diversify their revenue streams. This agreement consists of two parts and is used to process a par-trade in which the buyer cannot become a lender and must trade as a stake. Risk participation is a kind of off-balance-sheet transaction in which a bank sells its exposure to another financial institution as part of a possible obligation such as the acceptance of a banker. Risk participation allows banks to reduce their exposure to defaults, foreclosures, bankruptcies and corporate bankruptcies. As part of risk sharing, the EBRD provides partner banks with risk participation schemes that are financed or not hedged in dollars, euros or local currency, under which the EBRD assumes part of the under-credit risk granted by partner banks to eligible clients. The IIFM-BAFT Master Participation Agreements (IIFM-BAFT MPA`s) consists of two separate standardized framework documents to ensure unfunded and unfunded participation agreements for trade finance operations. The framework contracts are complemented by a structural orientation memorandum and an operational orientation memorandum in order to allow a better understanding of the use of documentation of the Sharia, legal and operational aspects. In addition, there is a separate debate on Sharia law for each MPA standard. Industry groups have tried to ensure that risk equity agreements are not treated as swaps by the SEC. A credit is the extension of money from one party to another on a repayable basis for a set period of time and generally for certain interest based on a credit agreement….