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. Last Updated: 07/27/2016

We Need Time-Out, Banks Say

The Association of Russian Banks on Wednesday called for curbs on foreign banks to stay, saying the market was not ready to compete with Western rivals. "We need a time-out to create a proper banking system in Russia," said Sergei Yegorov, president of the association. "It's not that we're dumb conservatives not letting anyone in. We just want a proper financial system first," he told a news conference. Central Bank Chairman Viktor Gerashchenko said Tuesday that the bank and government would submit a draft decree to President Boris Yeltsin by June 8 to ease curbs on foreign banks that were imposed in November, just before last December's parliamentary elections. Yeltsin's restrictions, designed to please the strong banking lobby, froze new foreign bank entry to Russia until 1996 and imposed offshore status for six licensed foreign banks that had not yet opened here. A total of 12 foreign banks had received licenses before Yeltsin introduced the curbs. These include Credit Suisse Bank, Chase Manhattan, Citicorp, ABN-AMRO Bank and ING Bank. "We met Yeltsin last year and urged him to impose curbs on foreign banks. We're guided by Yeltsin's decree. We hope the conditions of our agreement will be fulfilled," Yegorov said. "Otherwise, it will be like a calf butting an oak tree." The association groups 820 of Russia's 2,220 banks , of which bankers say only a handful meet Western standards. The number of Russian banks is growing by some 100 a month, and Central Bank officials say only 7 percent meet a minimum capital requirement of two billion rubles (over $1 million). Central Bank spokesman Alexei Sitnin said this week that the bank expects to revoke the licenses of as many as 100 commercial banks over the next few months for violations of Russian banking law. (Reuters, MT