Install

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

. Last Updated: 07/27/2016

Banking Supervision Is Urged

The government must strengthen its supervision of the banking system and crack down on suspicious banks that continue to operate, Finance Minister Alexei Kudrin said Tuesday.

Meanwhile, Vedomosti reported Tuesday that the government's campaign to stop banks laundering money had not stopped the practice, though it had almost doubled the cost of engaging in it.

Kudrin, speaking following the assassination last week of central banker Andrei Kozlov, said reforms launched by Kozlov, Russia's chief banking supervisor, would go on.

"We will continue this work to strengthen and reinforce supervision," Kudrin told journalists at the State Duma. "We need to strengthen supervision, because dubious banks still exist."

Kozlov was shot and fatally wounded last Wednesday by unknown gunmen in what investigators suspect was a contract killing linked to his drive to clean up Russia's murky banking system. He died of his wounds on Thursday.

The central bank has stripped nearly 80 of Russia's more than 1,200 banks of their licenses in 2005 and 2006, many on suspicion of money laundering or helping firms set up slush funds to pay wages and bribes with so-called "black cash."

President Vladimir Putin, expressing consternation at the "vast sums" washed through Russia's banking system, last Friday set up an inter-agency task force to drive forward efforts to shut down fly-by-night banking operations.

Vedomosti reporter that the Central Bank revoked the licenses of 79 banks last year for laundering an average of 7.75 billion rubles ($290 million) per month, citing the results of an investigation of 25 of the banks that lost their licenses.

As a result of the campaign, banks engaged in money laundering are now charging 4.5 percent to 5 percent of the sum involved versus 2.5 percent to 3 percent last year and 1 percent in 2004, the newspaper reported.

(Reuters, Bloomberg)