DIA approves 27 banks for recapitalization as Gref predicts crisis

Sberbank CEO German Gref

Sberbank CEO German Gref

 DIA approves 27 banks for recapitalisation: The DIA, Russia’s  Deposit Insurance Agency, has approved a list of 27 banks for recapitalisation through a federal loan bond. All the banks who have made it onto the list will be given the resources of up to RUB1 trn – approximately 15% of the total capital of the Russian banking system. To qualify for state aid a bank must have a minimum capital of RUB25bn and be prepared to inccrease the size of its loans to businesses operating in priority sectors of hte Russian economy by at least 1% a month portfolio of loans to enterprises of priority sectors of the Russian economy, at least 1% per month.
In the meantime, Sberbank’s CEO German Gref used last week’s Gaidar economic forum to paint a bleak picture for the short-term future Russia’s banking sector and predicted a “massive” banking crisis and a return to a centralised economy.”The state will capitalize the banks and increase its stake in them, and the banks will buy industrial enterprises and become financial-industrial groups,” Gref said during the forum. “All our economy will be state-run.” Interfax, The Moscow Times