INTERVIEW: Cbanker: 29 banks may raise capital to become universal

MOSCOW, Jun 8 (PRIME) -- There are 237 Russian banks with capital below 1 billion rubles and 29 of them can increase capital to acquire a universal license, Central Bank Deputy Chairman Vasily Pozdyshev said in an interview with PRIME on Thursday.

In May, President Vladimir Putin enacted a bill to create a three-level banking system in Russia. From January 1, 2018, the minimal capital requirement for a universal banking license will be 1 billion rubles, and for a basic license it will remain unchanged at 300 million rubles. All procedures to upgrade a license from basic to universal must be finished until January 1, 2019.

“As of May 1, we had 551 banks operating within the banking system… including 237 banks (with a capital) of under 1 billion rubles. They may be divided into three categories, one of which comprises 29 banks with a capital of 700 million rubles to 1 billion rubles,” the official said.

He added that these 29 banks will need up to 300 million rubles to obtain a universal license and have good chances of doing so.

Pozdyshev said that a new bank bailout mechanism via a consolidation fund may be launched in late July.

A new law to establish the Banking Sector Consolidation Fund using money of the central bank to finance bailing outs was adopted in May. The law also envisages creation of a managing company, which will represent the regulator to prevent bankruptcy and settle obligations of banks under a bailout procedure and to do necessary injections into their capitals to sell them at an open auction after the procedure has been completed.

“The consolidation fund is in fact several special accounts in the Bank of Russia. The decision to create special accounts on the balance of the central bank was made by its board of directors on May 18 and approved by the National Financial Board on May 26, so we can say the Banking Sector Consolidation Fund is active,” the official said.

Pozdyshev also said that the central bank is concerned about the insufficiency of punishment for unfair bankers issuing false banking reports and added that though the central bank has no legislative initiative power, it has been participating in the work to amend the Criminal Code to fight financial reporting frauds more effectively.

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