An article which imposes strict restrictions on foreign investors is to be deleted from the law.
Photo: Dmitry Kostyukov
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Russian Govt Gives Overseas Investors the Green Light
The Russian government has endorsed amendments to give equal rights to Russian and foreign investors in buying stakes in Russian banks. Experts say that Russian medium-sized banks will get the biggest influx of investors, which will raise their status on the market.
Current laws bind banks to inform the Central Bank of purchases of over 5 percent of the bank’s stocks and ask for its consent when selling more than 20 percent to one company. The new amendments suggest decreasing this limit to 1 and 10 percent, respectively. An article which imposes strict restrictions on foreign investors is to be deleted from the law.
Experts believe that the Central Bank has made rules tougher for Russian banks in an effort to control the industry better, which is quite in line with the recent crackdown on criminal share holdings in banks. Orgrexbank CEO Igor Kogan says: "It's better to spend one month getting approvals of the Central Bank than have banks with bubble capital."
Medium-sized banks welcomed the amendments, hoping to attract overseas investments and thus improve their status on the market. Alex Kantorovich, an expert at MDM-Bank, said: “There were lots of cases when a bank was willing to sell stocks, and a client was ready to buy them, but it was taking months to get the endorsement of the Central Bank, so deals usually fell though.”
However, not everyone on the market is so upbeat about the new amended bill. Garegin Tosunyan, head of the Association of Russian Banks, is convinced that with the government’s new course Russia risks losing its financial market because “external investors will buy it all.”
www.kommersant.com
All the Article in Russian as of Sep. 22, 2006
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