Major firms in Russia, including top gas producer Gazprom, have joined the call to use domestic ratings in the Russian banking sector while implementing new financial regulations.

The central bank, however, is completely resisting the scheme and has asked the lenders to act in accordance with the Basel III regulations, a globally agreed set of measures developed by the Basel committee on banking supervision.

According to the officials, using domestic rates can help the banking sector in easing the pressure and also help them to cut the lending rates.

The central bank insists on using its own in-house ratings, rather than the ratings given by domestic agencies.

Gazprom deputy CEO, Famil Sadygov said it will be very difficult to forecast the accessibility of external market to the Russian borrowers due to political reasons and therefore the development of Russia’s own domestic ratings is necessary for the Russian banking sector.

He added, “We believe that using the national ratings would make it possible to significantly lower pressure on banking capital, having a positive impact on the cost of borrowing, both for borrowers and banks.”

According to Basel III regulation, the banks are required to bring in reforms to increase the capital buffers, a process which might strain the nation’s banking sector. Russian finance minister Anton Siluanov has instructed the central bank to prolong the process until domestic ratings can be used.

Russia formed its own domestic rating system in 2014, after the western countries started imposing sanctions on it. Russia’s use of its own ratings had led global rating agencies to cut Russia’s sovereign rating.