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. Last Updated: 07/27/2016

Bank Reform Bill Passes First Parliament Reading

The State Duma gave preliminary approval Wednesday to a key bank restructuring bill designed to please the IMF, as talk of a vote of confidence in the government and a new political crisis fell to a hush.

The bill "On restructuring credit organizations," the first of 31 new laws promised to the International Monetary Fund in return for the release of $4.5 billion in credits, passed the lower house on first reading as expected, by a vote of 365-5. It has two readings to go, and is likely to be heavily amended.

The measure is expected to result in the bankruptcy of six of Russia's commercial banks, most of which suffered badly in the Aug. 17 ruble devaluation and debt default. The bill also defines the noncommercial status of ARKO, the national bank restructuring agency, and seeks to ban irresponsible bankers from working in the sector.

The bill was one of only a few approved by the Duma budget committee.

Several deputies have threatened to reject some bills, including those putting a heavy tax on large-engine automobiles and gas stations set for debate Friday.

Rejection of any of the bills could pit the Duma against the new government in a war of nerves.

Prime Minister Sergei Stepashin had threatened to force the Duma into a confidence vote if it failed to pass the bills, which the previous government had agreed to with the IMF. If the Duma voted no-confidence in Stepashin's government, President Boris Yeltsin would have to decide between dissolving the Cabinet and dissolving the Duma and calling new elections.

On Wednesday, however, Stepashin's deputy appeared to retract the threat.

"A hard link between the rejection of the bills and taking up the question of confidence in the government is incorrect," First Deputy Prime Minister Viktor Khristenko said, Interfax reported.

Our Home Is Russia faction Deputy Vladimir Tarachyov said the government had sought compromises on some bills by informally offering revisions.

Stepashin, for his part, said he would meet Duma leaders Monday to "explain the consequences of rejecting the packet of economic bills," Interfax reported.

Communist Party leader Gennady Zyuganov, whose faction is divided over the package of bills, shrugged at the possibility of a confidence vote.

"As far as early elections go, we're ready," he said.