June 30, 2009

Russian banks ready to increase lending

The chairman of Russia's Central Bank, Sergei Ignatyev, said banks in Russia are ready to comply with the prime minister's orders to increase lending.

The outside crisis factors that were the thrusts, as it were, for our economic crisis are not active any more, Ignatyev said during a meeting with Prime Minister Vladimir Putin.

The oil price is normal and the capital outflow ... steeply decreased. A lot depends on us now, he said.

Earlier this week, Putin told bank chiefs from five state-controlled banks, including Sberbank, VTB, Gazprombank Rosselkhozbank and VEB to cancel vacation plans until they could put programs together to lend about $15 billion by Oct. 1.

The state ... is assuming the main risks, Putin said, referring to a government program to guarantee $9.6 billion in bank loans.

The program, which guarantees half the banks' new lending, began in February, but banks were unhappy with the terms and no loans have been guaranteed to date, The Moscow Times reported Tuesday.

Putin said the program was changed to mitigate the banks' concerns.