Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Credit Suisse, ING Win Licenses, But Await Vote

Two more Western banks announced Wednesday that they have received a full Russian banking license from the Russian Central Bank, only days before parliament votes on a law that may ban foreign banks from Russia.

Cornelie Goedhuis, consultant at the Moscow office of ING Bank, said that the Russian Central Bank had granted a general license for operation of one Russian subsidiary on Monday. Credit Suisse, the largest bank in Switzerland, announced it received a full banking license as well.

In response to a strong protectionist lobby from Russia's young commercial banks, parliament has approved a law that requires all these banks to renew their license by January 1994 and proposes to exclude foreign banks from most activity in Russia until 1996.

President Boris Yeltsin vetoed the law, but parliament may override him when it votes on the law again. A parliamentary banking committee spokesman said that hearings would be held on the law on Sept. 28 and the vote could take place early in October.

The Central Bank has supported the entry of foreign banks on a limited scale as a means of promoting competition in Russia's overpriced market for bank services. A recent rush of new licenses and bank openings may be an attempt to entrench foreign banks in Russia before parliament can pass its law.

Wednesday marked the first day of business for the Credit Lyonnais office, making it the second foreign bank to open a fully licensed bank in Russia. Company executives refused to comment on the opening.

Four banks BNP-Dresdner Russia, Bank of China, Societe Generale and Credit Lyonnais have already received a full license. BNP-Dresdner officially opened its St. Petersburg office last week. Bank Austria, the first foreign bank to set up shop here last year, received only a partial license that banned ruble accounts and service to private persons.

If passed, the law could reduce a full license into a more limited license, said Martin Emch, chief representative of Credit Suisse in Moscow. Emch said that foreign banks should try to convince parliament not to pass the law.

Both Goedhuis and Emch said they hoped to open a Moscow subsidiary in the first quarter of 1994. Emch said that the Credit Suisse bank would have a starting capital of $20 million, a staff of 35 to 50 people, and would only service foreign corporate clients before catering to Russian companies in later years.

He said his bank had already set up Over 100 correspondent accounts with Russian banks for money transfers.

ING bank expects to offer basic services such as money transfers, deposits and accounts to foreigners and Russians but will also offer trade commodity financing in Russia, already a major business for ING in Russia, Goedhuis said.