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. Last Updated: 07/27/2016

Rules of Tender Bar Most Banks

The government has announced conditions for a tender to choose commercial banks authorized to handle the some 20 percent of federal budget revenues that pass through the customs service's bank accounts.

Conditions announced Tuesday set tight regulations for banks hoping to take part in the tender - a move that has drawn vociferous protest from some banks bidding for a share of the accounts.

To take part in the tender, banks must have equity of more than 800 million rubles ($32 million), no arrears to the budget and no delayed payments to clients; banks also must have held an operating license for at least three years, First Deputy Prime Minster Viktor Khristenko said, Prime Tass reported.

The tender date will be announced before Aug. 20, he said.

Members of the Finance Ministry's monetary commission met amid Monday's change of government to decide on the new tender conditions.

"It was time to make the system more legitimate with a new tender and new conditions for the new economic situation," Anton Siluyanov, head of the Finance Ministry's macroeconomic and banking department, said in a telephone interview.

But even though Siluyanov said the minimum equity limit for the banks was aimed at making sure the banks were capable of handling the flow of customs funds, the high level drew fire from some bankers.

"This level could limit the tender to as little as three to five banks, which could torpedo the whole process," said Pavel Busygin, a senior spokesman for Probiznesbank.

Busygin said the high equity limit was due to the fact that Monday's political turmoil had meant that Deputy Finance Minister Oleg Vyugin and Mikhail Zadornov, Russia's liaison with international financial institutions, were absent from the monetary committee meeting. Beforehand, it had seemed likely that a 500 million-ruble minimum equity limit would be set, he said.

The equity requirement alone limits the tender to only the top 18 banks, analysts said.

If interpreted literally, some of the other conditions could cause difficulties for Rosbank, currently the single biggest holder of customs accounts.

Last August's financial crisis wreaked havoc with the finances of many of the banking institutions handling customs accounts. Rosbank, set up at that time by Uneximbank, MOST-Bank and Bank Menatep, soon snagged the accounts handled by those three banks. The Interros Group, which owns Uneximbank, has since gained sole control of Rosbank. The three banks set up Rosbank by purchasing and transforming Bank Nezavisimost, a minor bank founded early this decade.

MOST-Bank is still in business, while much of bankrupted Bank Menatep's business has ended up with its former sister bank, Menatep St. Petersburg.

Along with the MFK Bank accounts it has snared, Rosbank's management of the customs accounts, once handled by its three parents, gives it 40 percent of all customs accounts, according to the bank's own estimates, as supplied by a Rosbank spokesman.

There is a 30 percent limit set on the maximum amount of the accounts each bank can handle, Siluyanov said.

Rosbank declined to comment on the process until the tender has been held.

Meanwhile, a proposal forwarded by Interros head Vladimir Potanin to transfer all the customs accounts to the care of a federal treasury system is still under discussion by the government.

"The Finance Ministry is still holding negotiations on this proposal, but it's possible that a federal treasury system could be up and running by the end of 2000," he said.