Russian banks invest $40bn in real economy

Since 1998, Russian banks have invested about $40bn in the real sector of the Russian economy, CEO of Sberbank Andrey Kazmin reported at today's round-table meeting "On State Policies in the Field of the Development of the Russian Banking System".

Kazmin pointed out that the problem of crediting the real sector of the economy was that out of the $40bn, long-term credits amounted to $3bn. The rest resources are medium-term and short-term credits. He stressed that as of now, the majority of banks faced the problem of receiving money for a long term, which hampered their investing in the real sector of the economy.

Kazmin also stressed that to date, banks had restored their creditworthiness and ability to accumulate resources as compared to the situation after the 1998 default. In his opinion, now the state must amend banking legislation considerably. For example, Kazmin believes that Russian banking legislation does not encourage the creation of a branch network. Additionally, high taxes hinder the development of the Russian banking system. Sberbank CEO pointed out that Sberbank had transferred RUR14bn (about $443.37m) in taxes to the budget in 2001, and over RUR21bn (about $665.06m) in 2002.