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

. Last Updated: 07/27/2016

Cabinet OKs Banking, Currency Bills

The Cabinet on Thursday gave final approval to a raft of bills on currency liberalization and insuring private bank deposits.

Economic Development and Trade Minister German Gref said his ministry, along with the Finance Ministry and Central Bank, which together drew up the bills, would make technical amendments before submitting them to the State Duma at the end of next week.

Under the draft currency bill, mandatory sales of 30 percent of hard currency earnings to the Central Bank would remain in place until 2007 and the bank would retain its right to introduce capital controls to protect ruble stability in case of emergency.

The controls include a two-month 100 percent retainer on all hard currency exports and a two-month 20 percent retainer on hard currency imports.

"We expect the ruble to become a hard currency by 2007," Gref said.

The Cabinet expects the bill on insuring deposits to increase competition in the retail banking market, which is dominated by state-controlled Sberbank.

Under the system, banks must meet six criteria to become members of a special insurance fund that would pay out money to depositors who lose their savings in the event of an economic crisis. The government can borrow from the Central Bank or other sources if there is not enough money in the fund.

The insurance plan would guarantee up to 85 percent of deposits in the banking system. The fund would pay 95,000 rubles ($3,000) maximum to individuals.

"The main goal of the system is to protect small and medium-size deposits, which account for the largest portion of the country's savings," Prime-Tass quoted the government press service as saying.