Magazine article American Banker

Hopes Stirred by Russian Criticism of Curbs on Foreign Banks

Magazine article American Banker

Hopes Stirred by Russian Criticism of Curbs on Foreign Banks

Article excerpt

MOSCOW -- Foreign banks planning to venture into Russia welcomed news that crubs are likely to be reviewed and said they wwere going ahead with business plans as usual.

"This does not surprise. I hope the issue will be resolved in the nearest future," said Miljenko Horvat, head of Citicorp's Russia subsidiary.

Earlier, Prime Minister Viktor Chernomyrdin said Russia was likely to review crubs on foreign banks because a protected environment for Russian banks was not beneficial.

'Setting the Stage'

Bankers said Mr. Chernomydrin's comments were in line with previous signals from the central bank and the government.

"They are setting the stage," said another Western banker. "We have been told by the central bank that resrictions on foreign banks will be scrapped shortly."

"I think life will focus us to take a new approach toward competition with foreign banks. Hothouse conditions do not seem good for our bankers," Mr. Chernomrydin said.

He added: "We are for removing unjust restrictions on banks' participation in privatization, including foreign bank curbs."

Licenses Scare

Only a handful of foreign banks are now licensed to operate in Russia, which has 2,048 domestic banks.

A Yeltsin decree last November barred licensed foreign banks from doing business with Russians, curbed their activities to offshore and froze new foreihn bank entry until 1996.

Chase Manhattan, one of the biggest U. …

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