Interest on Account Balance

Interest on Account Balance

The Interest-on-Balance banking product is offered to legal entities (except for banks), sole proprietors, and individuals engaged in private practice under the Russian law after they sign an interest-on-balance addendum to the cash and settlement agreement with Absolut Bank. Interest can be accrued on the trigger balance and average monthly or quarterly balance of the customer's account.

This banking product provides:

• Efficient application of temporarily idle funds
• Income from the funds which cannot be invested in other financial instruments, such as deposits, promissory notes, etc., for any reason
• Additional income without time losses and complexities (neither depository account nor additional documents¹ or transfer from the settlement account with the Bank required)
• Availability of the funds when required²

¹ If the constituent documents of the customer are amended or the authorized persons are changed, the Bank may request, prior to signing the agreement, to submit duly certified documents as per the approved document list, as required in such cases by regulations of the Bank of Russia or internal regulations of the Bank.

² Covenants which, if violated, result in termination of the agreement are listed in the description of each product.

1. Trigger Balance

The trigger balance is a minimum allowed account balance expressed in a specified currency within the period stipulated in the interest-on-balance agreement.

• The minimum period of the agreement is 1 (One) settlement month (as set forth in Article 192 of the Russian Civil Code).
• The maximum period of the agreement is 12 (Twelve) settlement months.
• The minimum trigger balance is RUB 3,000,000 (Three million rubles) or an equivalent in USD/EUR at the exchange rate of the Bank of Russia as of the agreement date).
• Currency: RUB, USD, EUR.

2. Average Monthly Balance

The average monthly balance is a sum of opening balances on each calendar day in a certain month divided by the actual calender days in such month.

• If the customer has signed an addendum to the cash and settlement agreement to accrue interest on the average monthly balance, such customer may not change the averaging principle for the previous period (for example, average the balance for the previous quarter).
• The minimum period of the agreement is 1 (One) settlement month.
• The maximum period of the agreement is 6 (Six) settlement months.
• The agreement period may not be shorter or longer the minimum and maximum periods respectively and has to be a multiple of one settlement month.
• Currency: RUB, USD, EUR.
• Interest is accrued monthly on the last business day of the month and the last day of the agreement period provided that the customer fully complies with the agreement.
• If the customer fully complies with the agreement, the interest accrued is credited to the customer's account on the first business day following the settlement month or, for the last settlement month, on the first business day following the last day of the agreement period.
• The Bank may terminate the agreement unilaterally if the customer fails to maintain the minimum average monthly balance within three subsequent settlement months.
• The agreement is considered to be terminated on the date when the customer signs an addendum to the cash and settlement agreement to maintain a credit turnover and/or a loan agreement which provides for maintaining a credit turnover by the customer (or the financial group determined by the Credit Committee) with the Bank. Interest accrued is not paid for an incomplete settlement period.

3. Quarterly Average Balance

The quarterly average balance is a sum of opening balances on each calendar day in a certain quarter divided by the actual calender days in such quarter.

• The minimum period of the agreement is 1 (One) settlement quarter.
• The maximum period of the agreement is 2 (Two) settlement quarters.
• The agreement period may not be shorter or longer the minimum and maximum periods respectively and has to be a multiple of one settlement quarter.
• Currency: RUB, USD, EUR.
• Interest is accrued quarterly on the last business day of the quarter and the last day of the agreement period provided that the customer fully complies with the agreement.
• If the customer fully complies with the agreement, the interest accrued is credited to the customer's account on the first business day following the settlement quarter or, for the last settlement quarter, on the first business day following the last day of the agreement period.
• The agreement is considered to be terminated on the date when the customer signs an addendum to the cash and settlement agreement to maintain a credit turnover and/or a loan agreement which provides for maintaining a credit turnover by the customer (or the financial group determined by the Credit Committee) with the Bank. Interest accrued is not paid for an incomplete settlement period.

Standard Terms

• The customer may choose only one product type for each bank account.
• Interest is not accrued in the settlement period if the agreement is violated. Interest accrued and outstanding is not paid for an incomplete settlement period.
• If the cash and settlement agreement or interest-on-balance addendum is terminated early, the Bank does not accrue and pay interest for an incomplete settlement period.
• The customer may have only one active addendum for a particular product type to one cash and settlement agreement.
• No interest-on-balance product is made available to a customer if such customer has signed a loan agreement which provides for maintaining a net credit turnover with the Bank and/or an addendum to the cash and settlement agreement for the same. Customers are considered to be all companies within the financial group specified in the decision of the Credit Committee.
• Any amendment to the agreement requires its termination and renewal.

Please do not hesitate to contact Corporate Banking International Division of Absolut Bank should you have any questions:

Tel. +7 495 228 69 66
Fax + 7 495 777 71 60

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