UPDATE3: Russia’s Promsvyazbank asks cbank for credit line

(Rewrites headline, adds details throughout)

MOSCOW, Feb 20 (PRIME) -- Russia’s Promsvyazbank was among the banks who filed a request to the central bank for an irrevocable credit line in order to comply with liquidity coverage ratio regulation under the Basel III standards, the bank’s Deputy CEO Vladimir Mamakin told PRIME on Saturday.

Central Bank Chairwoman Elvira Nabiullina in an interview to Reuters that the central bank has approved provision of irrevocable credit lines totaling 600 billion rubles to some systemically-important banks so that they can comply with the regulation.

Mamakin said that this money is rather expensive, and will only become an emergency measure in case of shocks in the economy. Promsvyazbank filed a request for the credit line seeking exactly the emergency-case instrument and it does not plan to use the money right now, he said without pointing out the amount of a credit line the bank requested from the regulator.

The liquidity coverage ratio regulation was introduced for 10 systemically-important banks from January 1. The minimum ratio was initially set at 70%, and it will be gradually raised to 100% by 2019. The regulator allowed banks to include the irrevocable credit lines and excesses of assets denominated in foreign currencies into the ratio’s calculations.

The list of systemically important banks comprises Sberbank, VTB, Gazprombank, UniCredit Bank, Alfa-Bank, Otkritie FC Bank, Rosbank, Promsvyazbank, Raiffeisenbank, and Russian Agricultural Bank.

Representatives for Russia’s second largest bank VTB, Alfa-Bank, Raiffeisenbank, and Otkritie Financial Corporation (FC) Bank told PRIME the banks did not request any irrevocable credit lines from the central bank.

A representative for Alfa-Bank said the bank has no plans to open this credit line, while representative for VTB and Raiffeisenbank said the banks are studying reasons behind a request for the credit line. A representative for Otkritie FC Bank said the bank complies with all regulations of the central bank and has not asked for the credit line.

UniCredit Bank’s CEO Mikhail Alekseyev also said that the bank may submit a request for such credit line if the situation at the financial market deteriorates.

(76.3657 rubles – U.S. $1)

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