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. Last Updated: 07/27/2016

Banking Fines Proposed

Alarmed by mounting mutual debts among Russia's enterprises, the Finance Ministry has asked the Central Bank to issue fines to commercial banks and Central Bank branches for procrastination on transferring payments.

Interfax quoted ministry officials as saying that the total of inter-enterprise debts in Russia had risen to 4. 3 trillion rubles by Jan. 1, compared to the 3. 2 trillion in mutual debts that almost brought production to a standstill last summer.

The Central Bank, which is accountable to parliament, not the government, has already submitted a list of measures to turn the tide on the debt issue, including extensive auditing of commercial banks, the reorganization of regional cash settlement centers and the reintroduction of urgent payment checks.

In the debt crisis last July, the Central Bank's chairman, Viktor Gerashchenko, guaranteed all intercompany debt incurred before that date.

The move was widely criticized by the government which accused the Central Bank of fueling Russia's skyrocketing inflation without forcing loss-making companies to restructure.