Install

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

. Last Updated: 07/27/2016

Central Bank Concessions Leave Bankers Dissatisfied

The Central Bank eased some obligations on commercial banks just before new reserve requirements took effect, but an industry representative Wednesday called the move insufficient.


Reserve requirements were lifted on unpaid "interest rates on deposits, interbank credits, shareholders' dividends" and some other liabilities, a bank press statement said. New requirements went into effect May 1.


The bank also abolished requirements "on sums transferred as payments for issued shares," the statement said.


Last month the bank also slightly cut intended reserve requirements on some loans, bankers said it was not enough.


Mikhail Bazarya, head of the banks' department with the Commercial Banks' Association, called the latest decision "small concessions, which do not change the point of the matter."


Bazarya said banks' main demands -- to cut the amount of required reserves, to lift ruble reserves on hard currency accounts and to cancel daily reports on accounts to the Central Bank -- were not fulfilled. Leading bankers fiercely protested new reserve requirements, introduced by the Central Bank in February, ordering them as of May 1 to lodge a percentage of loans they extend and of hard currency they hold.


As of May 1, the Central Bank reduced reserve requirements on credits of up to 30 days to 20 percent, up to 90 days to 14 percent and on terms longer than 90 days to 10 percent.


Typical reserve requirements in Europe range from 1 to 5 percent.