Cbanker says Russian banking industry improves on better economy

NEW YORK, Oct 12 (PRIME) -- The central bank sees improvements in the Russian banking sector as economy expands and the regulator eliminates weak players from the market, Central Bank First Deputy Chairwoman Ksenia Yudayeva said late on Wednesday at a Moscow Exchange forum.

“There are two factors when we speak about the banking sector – the economy and the business model. The economy is improving, and we see improvements in the banking sector. Secondly, banks, both globally and in Russia, introduce rather risky models and check risks of their operations unduly,” Yudayeva said.

“We inspect banks that were created to finance their owners, and we look at cases connected to illegal use of banks’ capitals. We eliminate the banks that are engaged in money laundering or in illegal operations from the market.”

Some banks lost licenses as their business models were not fully compliant with regulatory acts.

“Zombie-banks do not help the economy grow, they hinder it. So we had to eliminate zombie banks from the banking system to achieve consistent organic growth…That is why our policy of improving health of the banking sector is a policy of cutting the amount of banks at least in the mid-term. We do this because we want to achieve sustainable growth, which is impossible when there are many zombie banks,” she said.

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