A bank is entitled to ascertain the source of a customer’s funds — the law frames this as the bank’s right and does not establish an obligation to exercise it (Article 7(1)(1.1) of Federal Law No. 115-FZ “On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism”). Since 26 October 2026, the Bank of Russia has recommended that banks exercise this right for cash transactions: for companies and individual entrepreneurs (IPs) — regardless of the amount; for individuals — for transactions of ₽5 million or more.
Below — how the bank’s right differs from an obligation, whom and which transactions the Bank of Russia recommendations concern, which documents are suitable for confirming the source of the money, what happens if they are not submitted, and how to prepare in advance.
Why a Bank Takes an Interest in Where a Customer’s Money Comes From
Banks and other organizations that carry out transactions with funds or other property are required under 115-FZ, when accepting a customer for service and in the course of servicing the customer, to obtain information on the purposes and nature of the business relationship and, on a regular basis, to take measures to determine the purposes of the customer’s financial and economic activity, financial position, and business reputation (Article 7(1)(1.1), version of 4 August 2026). This is part of the internal control rules that the organization is required to develop and apply for the purposes of combating the legalization (laundering) of proceeds; under the same rules, it is required to document transactions that appear convoluted or have no apparent economic sense, or that are repeated with signs of evading mandatory control (Article 7(2)).
Separately, the law classifies certain cash transactions as subject to mandatory control regardless of any suspicion: for example, the withdrawal of cash from, or the crediting of cash to, a legal entity’s account in the amount of ₽1 million or more is subject to mandatory control (Article 6(1)(1) of 115-FZ, as amended by Federal Law No. 331-FZ of 14 July 2022). Depositing cash by an individual into their own account is not on this list. A full breakdown of mandatory control and the signs of suspicious transactions is in the article “Financial Monitoring and AML/CFT in Simple Terms”.
Mandatory control applies to a transaction regardless of who the customer is, based on the amount and type of the transaction. Ascertaining the source of the money of a specific customer is a separate, more flexible tool: the next section is devoted to it.
Source of Funds for a Bank: When It Is a Right and When It Is an Obligation
Article 7(1)(1.1) of 115-FZ separates two different regimes within a single sentence of the law. The organization is required to take measures to determine the purposes of the customer’s financial and economic activity, financial position, and business reputation, and is also entitled to take the same kind of measures to determine the sources of the customer’s funds or other property. Financial position is the bank’s obligation. The source of the money is a right: the law does not establish an obligation to ascertain it, and the organization determines the nature and scope of such measures itself, taking into account the degree of risk of the customer carrying out suspicious transactions (ibid.).
This right is exercised at the bank’s discretion and operates alongside the customer’s obligation to provide the organization with the information needed to comply with the requirements of 115-FZ, including information on beneficiaries, founders, and beneficial owners (Article 7(14)). This provision does not refer to the source of the money directly — it concerns the information necessary to comply with the law as a whole.
For foreign politically exposed persons (foreign PEPs), the law establishes a separate obligation to take reasonable measures available in the circumstances to determine the sources of their funds or other property (Article 7.3(1)(3) of 115-FZ). For officials of public international organizations and for persons holding certain public offices from the established lists, the same obligation applies if the organization has assigned such a customer a high degree of risk (Article 7.3(3)). For spouses and close relatives of a foreign PEP, the law establishes heightened attention to their transactions (Article 7.3(1)(5)) — more on the regime for such persons in the article “Politically Exposed Person (PEP): Who It Is and What 115-FZ Requires”. The legal status of the source of funds for different categories of customers is discussed in detail in the article “115-FZ: What Businesses Are Required to Do”.
A bank is entitled to request the source, but the law does not oblige it to do so. When exactly to exercise this right for cash transactions has been clarified since 26 October 2026 by the Bank of Russia recommendations — the next section covers them.
The Bank of Russia’s Cash Recommendations From 26 October 2026: Whom and Which Transactions They Concern
On 26 October 2026, the Bank of Russia issued Methodological Recommendations No. 5-MR on determining the financial position and the sources of funds of customers of credit institutions. This is the regulator’s clarification, not a provision of law: the recommendations do not create new rights or obligations; they describe in which cases the Bank of Russia advises banks to exercise the right to determine the source of cash funds that the bank already has under Article 7(1)(1.1) of 115-FZ.
The recommendations apply to a certain group of customers and a certain list of transactions (5-MR, clause 1):
| Addressee | Threshold at which the recommendations apply | Exceptions |
|---|---|---|
| Legal entities | Regardless of the transaction amount | Russian credit institutions; state and municipal institutions; foreign banks — in transactions involving the transfer of cash rubles to a credit institution in exchange for non-cash rubles |
| Individual entrepreneurs | Regardless of the transaction amount | — |
| Individuals | A single transaction or the total of transactions for a calendar month equals or exceeds ₽5 million | — |
The ₽5 million threshold is set only for individuals. For companies and IPs, the recommendations contain no amount threshold at all — the Bank of Russia recommends that banks pay attention to their cash transactions regardless of size, unless one of the exceptions discussed below applies.
The recommendations concern certain transactions with cash rubles: depositing to a bank account; transfers of funds without opening an account made by accepting cash; the purchase of investment precious metals in bars, coins made of precious metals, and processed natural diamonds for cash; the purchase and sale of cash foreign currency for cash rubles (5-MR, clause 1). The recommendations also cover the same transactions with cash foreign currency (clause 8). The withdrawal of cash from an account is not on this list.
For transactions on this list, the Bank of Russia recommends that banks: determine the customer’s financial position and the sources of their money before the transaction is carried out, to an extent commensurate with its amount; obtain documentary confirmation before the transaction is carried out; check the transaction against the purposes the customer declared at identification; monitor the amount of transactions, including those carried out through ATMs (5-MR, clause 1(a)–(d)).
When a Bank May Refrain From Asking for Documents
The recommendations allow a bank not to apply them if at least one of two conditions is met (5-MR, clause 2):
- the activity of the customer — a legal entity or IP — is directly related to cash settlements, for example retail trade — except where the cash being deposited begins to significantly exceed the average monthly turnover on the customer’s account, grows sharply, or is not commensurate with the scale of its activity;
- the bank already has documented information about the customer’s financial position and the sources of their money to an extent commensurate with the transactions being carried out — except where the volume of cash transactions significantly exceeds the figures of previous periods.
What Changed Compared With the May Recommendations
Until 26 October 2026, Recommendations No. 1-MR of 20 May 2026 were in effect — with their cancellation, the earlier No. 9-MR of 27 April 2024 and No. 11-MR of 9 September 2025 also ceased to have effect (5-MR, clause 10). The canceled May recommendations suggested that a bank analyze transactions against analytical indicators: for example, for individuals — a volume of ₽5 million or more over 30 days, accounting for at least 70% of turnover and followed by transfers abroad; for legal entities and IPs — deposits of ₽30 million or more over 30 days where average monthly turnover is exceeded or the cash turnover is atypical for the customer. Such thresholds and indicators are no longer in effect.
The current recommendations are structured differently: for individuals — a fixed threshold of ₽5 million for a single transaction or over a calendar month, with no condition about subsequent transfers abroad; for legal entities and IPs — any amount, with no threshold at all; documents are recommended to be obtained before the transaction is carried out; transfers without opening an account, purchases of precious metals and diamonds, and transactions with cash foreign currency have been added to the list of transactions. The Bank of Russia itself describes the new recommendations as measures that affect a narrow segment of credit institutions’ customers and do not affect the interests of bona fide citizens.
Documents Confirming the Source of Funds
The documents a customer submits to confirm their financial position and the source of their money should leave the bank with no doubts as to their authenticity, sufficiency, and compliance with the requirements established for the specific type of document, including the presence of a seal, stamp, or signature of an authorized person. The bank is recommended to analyze such documents on their substance, without a formal approach, and taken together they should not raise doubts as to the lawfulness of the money’s origin (5-MR, clauses 4–6).
The appendix to Recommendations No. 5-MR gives an indicative list of documents — the list is open, and the bank may also accept documents not named in it:
For individuals:
| Source of the money | Which document is suitable |
|---|---|
| Income under an employment or civil-law contract | Certificate of an individual’s income and tax amounts (KND 1175018) |
| Self-declared income | 3-NDFL tax return (KND 1151020) |
| Income of a self-employed person (samozanyatyy) or IP | Certificate of registration (KND 1122035), certificate of the status of settlements for the professional income tax (KND 1122036) |
| Loan | Loan agreement and a document on the transfer or repayment of the money |
| Inheritance | Certificate of the right to inheritance and a bank statement on the withdrawal of cash received as an inheritance |
| Gift | Documents confirming the gift of cash |
| Sale of property | Sale and purchase agreement, transfer and acceptance certificate, extract from the Unified State Register of Real Estate (EGRN) describing the property and the rights to it |
| Leasing out property | Lease agreement, EGRN extract, vehicle registration certificate |
| A source not described above | Other documents — the list is open |
For legal entities and IPs:
| Source of the money | Which document is suitable |
|---|---|
| Revenue, if taxes are paid from an account at another bank | Tax reporting |
| Settlements under foreign economic activity | Foreign trade contract, cash receipt order, consignment note, customs declaration |
| Loan | Loan agreement, cash receipt order |
| Return of unspent accountable amounts | Cash book extract, cash receipt and cash disbursement orders, documents on settlements with accountable persons |
| Sale of property | Sale and purchase agreement, cash receipt order, EGRN extract, vehicle registration certificate |
| Leasing out property | Lease agreement, cash receipt order, EGRN extract, vehicle registration certificate |
| A source not described above | Other documents — the list is open |
If a customer — an individual or a legal entity — submits such documents, the bank is recommended to additionally request documents confirming the sources of the cash rubles, including those received from third parties (5-MR, appendix).
What Happens If the Origin of the Money Is Not Confirmed
If documents are not submitted or are insufficient, if the bank has doubts about their reliability, or if there are signs of structuring the transaction amount into parts, the Bank of Russia recommends that the bank consider: classifying the transaction as suspicious under its own internal control rules; refusing to carry it out under the right the bank already has under Article 7(11) of 115-FZ; revising the customer’s risk assessment upward (5-MR, clause 3). These are questions the bank is recommended to consider; the recommendations do not create automatic consequences — only the provisions of the law provide grounds for the actions themselves.
A bank is entitled to refuse a specific transaction to any customer; what differs is whether it can terminate the account agreement. Both are based solely on the provisions of 115-FZ:
| Addressee | Refusal of a specific transaction | Can the bank terminate the account agreement |
|---|---|---|
| Individual | The bank’s right when suspicions arise under its internal control rules (Article 7(11)) | No — Article 7(5.2) expressly excludes a customer who is an individual |
| IP | The bank’s right when suspicions arise under its internal control rules (Article 7(11)) | Yes, after two or more refusals to carry out transactions within a calendar year (Article 7(5.2)) — except where the bank, under its internal control rules, has assigned the IP a low level of risk |
| Legal entity | The bank’s right when suspicions arise under its internal control rules (Article 7(11)) | Yes, after two or more refusals to carry out transactions within a calendar year (Article 7(5.2)) — except where the bank, under its internal control rules, has assigned the legal entity a low level of risk |
The bank is required to report a refusal of such a transaction to the Federal Financial Monitoring Service (Rosfinmonitoring) no later than the next business day — this obligation is the same for all three addressees (Article 7(13)).
A refusal of a transaction under Article 7(11) concerns that particular transaction and does not in itself close the account: terminating the agreement is a separate ground in the law and applies only after repeated refusals within a calendar year (Article 7(5.2)). The customer is entitled to submit to the bank documents or information showing that there are no grounds for the refusal; the bank is required to consider them and, no later than 7 business days, report whether the grounds have been eliminated or not (Article 7(13.4)). If the bank has reported that the grounds cannot be eliminated, the customer is entitled to apply to the interdepartmental commission under the Bank of Russia (Article 7(13.5)) — the procedure for such an application and the review periods are discussed in the article “The Bank of Russia’s Know Your Customer Platform: What a Risk Zone Means for a Company”.
How to Prepare in Advance: Confirming the Source of Funds for a Bank
The Bank of Russia recommendations advise the bank to obtain confirmation of the source of the money before a cash transaction is carried out (5-MR, clause 1(b)). For the customer, this means that it is more practical to collect the documents listed in the section above in advance — before visiting the bank with a large sum of cash — than to look for them after the bank has already asked for explanations or refused the transaction.
For legal entities and IPs whose activity is not directly related to cash settlements, it is sensible to understand in advance exactly which transactions — the sale of property, the repayment of a loan, settlements under foreign economic activity — make up the amount being deposited in cash, and to have the supporting documents from the table above at hand. For companies and IPs whose activity is related to cash settlements, for example retail trade, the Bank of Russia recommendations allow the bank not to request these documents at all as long as cash volumes remain commensurate with the customer’s usual turnover.
This article is current as of 27 October 2026. Provisions are given as of that date: 115-FZ — version of 4 August 2026. Bank of Russia Methodological Recommendations No. 5-MR of 26 October 2026 apply from the moment they are posted on the official website of the Bank of Russia; from the same moment, Methodological Recommendations No. 1-MR of 20 May 2026, No. 9-MR of 27 April 2024, and No. 11-MR of 9 September 2025 were canceled.
A bank is entitled to ascertain the source of a customer’s money, but the law does not oblige it to do so — the bank has an obligation only with respect to the customer’s financial position (Article 7(1)(1.1) of 115-FZ). The Bank of Russia recommendations of 26 October 2026 do not change the provision itself. They suggest to banks when this right is worth exercising for cash transactions: for companies and IPs — regardless of the amount; for individuals — for a single transaction or transactions over a month of ₽5 million or more.
The consequences of not submitting documents depend on who the customer is. A bank is entitled to refuse a specific transaction to any customer, but the law allows it to terminate the account agreement on this ground only with respect to companies and IPs, and even then not always — an individual faces no such risk at all. Collecting documents from the recommendations’ indicative list in advance is more practical than looking for them after the bank has already asked the question.
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