PRESS: Russian govt can make defense order bank of Promsvyazbank

MOSCOW, Jan 19 (PRIME) -- The Russian central bank will cede Promsvyazbank to the government to create a bank to service state defense order and large state contracts, business daily Kommersant reported late Thursday, citing sources in the government.

The Finance Ministry said earlier on Thursday that the government will create a bank to handle state defense order and large state contracts, including provision of banking support, settlements with contractors or defense companies, and provision of loans to defense companies, in the conditions of Western sanctions.

Promsvyazbank, a top-10 bank by assets, has been undergoing bailout procedures led by the central bank since mid-December.

A source in the government’s finance and economy group said: “The stages are the following: firstly, the central bank will close a gap in Promsvyazbank and then define what capital the bank needs to fulfill new goals. Then, a legal transfer of the credit organization to the treasury will take place.” The procedures will be completed by April, the source added.

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