UPDATE2: Eight large banks quit Association of Russian Banks

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MOSCOW, Jul 17 (PRIME) -- Eight large banks, including Sberbank and VTB Bank, have withdrawn from the Association of Russian Banks (ARB) due to the association’s position on a number of issues, including the central bank’s activities to clean up the banking sector, the banks said in a joint statement on Monday.

The document was signed by CEOs of Sberbank, VTB Bank, VTB 24, Russian Agricultural Bank, Gazprombank, Alfa-Bank, Otkritie Financial Corporation (FC) Bank, and B&N Bank. The banks said the efficiency of the ARB’s operations has been falling recently and the management of the ARB does not take into account interests of the association’s members while making decisions.

“Unjustified criticism by the association of a number of legislative initiatives (for example, on the proportional regulation of the activities of credit institutions), as well as the central bank’s activities to clean up the banking sector from dishonest participants, hampers the growth of the banking system’s prestige, client confidence, development of competition on the financial market and leads to a deterioration of quality of banking services,” the statement said.

“Taking into account the abovementioned, we make a decision to withdraw from the association and consider all its further actions on our behalf to be unacceptable.”

The ARB said it was sorry that a number of its members have decided to withdraw and claims that all decisions are being made by its board and then approved at the meetings.

Alfa-Bank Deputy CEO Vladimir Senin told PRIME that a number of banks are discussing creation of a new association similar to the ARB.

“The question of changing the format of interaction between banks, including prospects of creation of a new banking association, is under discussion... We believe that the interaction of financial organizations should be based on new principles. Banks do not need a bureaucratic, uncontrollable machine. We need an association with a transparent structure, where the voice of each credit organization will be really taken into consideration,” Senin said.

“Just replacing the leadership of the association will not allow us to solve all the issues that have accumulated during its existence at once. We need structural reforms, including changes in the management principles of the association. The question of how the interaction between credit institutions will be built after leaving the ARB is under discussion,” he added.

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