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. Last Updated: 07/27/2016

Angry Depositors Have Their Day in Court




Nina Kalentyeva shook her head as she perused the conditions on which MOST-Bank offered to restructure her deposit.


"I am at a loss," the pensioner, 60, said. "I am old and I don't want to wait several years for my money."


Kalentyeva, her husband and her son each have 15,000 rubles ($963 at Thursday's official rate) frozen in three different ailing banks, and they have considered filing suit against the banks, but so far they have been discouraged by the huge crowds at the courts, which are flooded with thousands of suits against banks.


"If I go to the courts, I may just lose my health after losing my money," Kalentyeva said.


But an increasing number of more tenacious depositors have been winning cases against banks and even getting the verdicts enforced. Some lawyers say there soon will be a new wave of suits against banks as depositors realize that the restructuring terms bankers offer them are not going to improve dramatically.


Several large banks received long-term stabilization loans from the Central Bank last weekend, which were designed, among other things, to help the banks repay their depositors. But MOST-Bank, which received a 900 million ruble loan, has not changed its deposit restructuring terms, which allow depositors to get all their money back only if they have $500 or less in the bank. The rest is restructured into promissory notes, or veksels, maturing in a few years or placed in accounts tied to plastic cards that can be used in a limited number of stores.


Other recipients of the stabilization loans have slightly improved their terms for depositors or plan to do so.


SBS-Agro bank, which earlier did not envision paying its clients cash in the next few months, has allowed depositors to draw up to 500 rubles a day from cash machines.


A representative of Mosbiznesbank, which received a 1 billion ruble loan, said the bank stopped applying its old deposit restructuring scheme two days ago and was now working on a new, more favorable one.


Bank Vozrozhdeniye, another stabilization loan recipient, will release new deposit restructuring terms in "about a week," said the bank's spokesman, Rostislav Zolotaryov.


But there is no guarantee that depositors will like what the banks plan to offer them.


"So far many people have been waiting to see what the banks will come up with," said Igor Khon, a lawyer with Khavkin and Partners. "But once they see that what they are being offered is a long and difficult restructuring, not their actual money, they will immediately go to courts."


For a small number of an estimated 32,000 Muscovites who have sued their banks to date, the decision has already paid off.


According to Maya Komissarova, a lawyer with the Russian Confederation of Consumers, about 5 percent of the suits have ended in victories for disgruntled depositors, and about 1 percent of them have already been paid.


Komissarova estimated that about 15,000 suits have been filed against SBS-Agro, 5,000 against Inkombank, which was recently stripped of its license, and about 3,000 each against Promstroibank, Mosbiznesbank, MOST-Bank and Menatep.


Court cases are being won against other banks, too. The Golovinsky District Court in northern Moscow had decided 92 cases in favor of clients of Rossiisky Kredit by Wednesday, the court's chief bailiff, Larisa Zhenerikina, said. Last week, the bailiffs at Golovinsky court had only 40 such verdicts to enforce.


Lawyers say the number of legal victories for depositors is going to snowball.


"Judges tended to see defrauded investors in pyramid schemes [a few years ago] as people who were out to reap quick financial benefits and so just got what they deserved," said Komissarova, who so far has won 50 out of 250 suits she filed on behalf of bank depositors. "But now the judges' attitude is different, far more sympathetic. Some judges may even have their own deposits in these banks."


But the court decisions are difficult to enforce. A Moscow lawyer, who wished to remain anonymous, said corruption in the court system was preventing a higher percentage of depositors from getting back their savings.


Judges, typically paid 600 or 700 rubles a month, are offered large bribes by bankers to stall the cases, and bailiffs sometimes will not enforce court orders unless they are offered a percentage of the recovered money, the lawyer said.