UPDATE2: Russia’s Tatarstan says to support Tatfondbank as possible

(Adds bank’s comments in last two paragraphs)

MOSCOW/KAZAN, Dec 13 (PRIME) -- The government of the Russian republic of Tatarstan will support troubled Tatfondbank as much as possible, and the bank will not be merged with AK BARS Bank, Tatarstan’s head Rustam Minnikhanov told reporters Tuesday.

Business daily Vedomosti reported Tuesday that Tatfondbank could be merged with AK BARS Bank controlled by Tatarstan as part of the bank’s financial bailout plan. AK BARS Bank later denied the plan.

Tatfondbank, Russia’s 42nd largest bank by assets as of October 1, said Monday it registered higher demand for an early repayment of deposits in the wake of media reports on a possible bailout, and introduced a 15,000 ruble daily limit on cash withdrawals from ATMs and a 50,000 ruble limit for a one-time withdrawal from bank tills.

Kommersant business daily reported earlier that the bank has been having problems with liquidity since the start of the year.

The bank also failed to make a 1.856 billion ruble bond buyback on Tuesday due to a lack of necessary funds, according to its documents.

The bank said later on Tuesday it is suspending cash management services of its clients from Wednesday through Saturday to develop a complex of measures to restore its liquidity.

“Tatfondbank is doing everything possible to stabilize the situation as soon as possible,” the bank said, adding its financial bailout plan was sent to the central bank.

(61.5804 rubles – U.S. $1)

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