Kremlin-linked Rossiya Bank earning $27 million annually from inflated commissions on utility services

Rossiya Bank earns at least 2 billion rubles (about $27 million) per year on housing and utility payments. This was uncovered in a new investigative report from Proekt and The Bell on Yuri Kovalchuk — friend of Russian President Vladimir Putin and Rossiya Bank’s main shareholder. 

Approximately 150 organizations in different parts of central Russia collect payments for housing and utility services through Rossiya Bank. The bank also processes the population’s gas payments practically throughout the country. 

Rossiya Bank charges between 0.3 percent and 2.5 percent for its services, which is higher than the national average commission of 0.4 percent. According to The Bell’s calculations, this means housing and utility commissions alone must earn Rossiya Bank at least 2 billion rubles per year.

Moreover, Proekt and The Bell believe that Rossiya Bank became the main bank for processing housing and utility payments because many of the service providers that it receives commissions from are part of the Inter RAO group, which is headed by Yuri Kovalchuk’s son Boris.

The decision to accumulate payments for the largest regions in Rossiya Bank was made “at the highest federal level and passed down,” says the owner of a company in the housing management market, well acquainted with Kovalchuk’s ‘utility’ business.

According to Proekt and The Bell, Rossiya Bank has also become the largest insurance provider in Crimea. Since 2020, it has officially owned the insurance company Krymmedstrakh, which issues most of the compulsory medical insurance policies in the region. Of the 108 medical organizations registered in Crimea, 87 cooperate with Krymmedstrakh.

Rossiya Bank also has business interests in the Crimean wine industry. In 2017, its subsidiary bought the Novy Svet champagne factory for 1.5 billion rubles (about $20.4 million). The bank is also linked to the Inkerman winery and is the main contender for the purchase of the Massandra winery.

Previously, Proekt reported that Putin’s “close acquaintance” Svetlana Krivonogikh, who is possibly the mother of his third daughter, owns a 2.8 percent stake in Rossiya Bank. Kremlin spokesman Dmitry Peskov dismissed the investigation as “unfounded and unconvincing.”

Proekt and The Bell also reported that Putin’s friend Nikolai Shamalov, who in 2018 owned one of the largest stakes in Rossiya Bank (9.6 percent), was no longer a shareholder as of 2019. The investigation linked this development to Shamalov’s son Kirill’s divorce from Katerina Tikhonova, a woman widely believed to be Putin’s daughter.