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. Last Updated: 07/27/2016

Duma Votes to Rethink Bill on Curbing Central Bank Powers

The State Duma threw out a bill curbing Central Bank powers Friday in its final third reading and returned to the second reading to make major amendments in line with a government request.

The Duma rejected the bill as only 205 deputies voted for it, short of the minimum 226 votes required for approval. There were 39 votes against.

"As the deputies did not support the amendments proposed by the budget and credit organizations' committees for the third reading, the bill as a whole cannot be considered," Andrei Loginov, a government representative, told the chamber.

The bill provides for the establishment of a 13-member National Banking Council to be made up of parliamentary deputies, government and Kremlin officials and a Central Bank representative. The council would not have the status of a governing body.

Viktor Gerashchenko, who resigned as Central Bank chairman last month, strongly opposed the bill. The document was drafted by Gerashchenko's successor, Sergei Ignatyev, when he worked as deputy finance minister. But the Duma has redrafted the bill to curb the Central Bank's powers far beyond what the government wanted.

Deputy Prime Minister and Finance Minister Alexei Kudrin on Wednesday sent a letter to the Duma spelling out five key points that he said were unacceptable for the government.

Those include the National Banking Council's prerogative to set accounting rules for the Central Bank, which it currently sets itself, and the right to vet the bank's annual report.

Kudrin objected to the proposed frequency of checks conducted by the Central Bank in commercial banks. The Duma says there can be no more than one check a year, while the Central Bank and the government insist on two.

A bill must be approved by the Duma in three readings, supported by the Federation Council and signed by the president to become law.