Draft Eases Foreign Bank Curb

The government will submit a draft decree to President Boris Yeltsin by June 8 to ease restrictions on foreign banks, Central Bank Chairman Viktor Gerashchenko said Tuesday.Gerashchenko told a press conference that the main sticking point among several proposals under consideration was over access to Russian customers."The dispute is whether to allow foreign banks to work with Russian residents in rubles," Gerashchenko said.He said that the Central Bank had been under pressure to loosen restrictions since last November, when President Boris Yeltsin signed a decree that imposed offshore status on six foreign banks licensed to operate in Russia that had not yet opened here. The decree barred the banks from dealing with Russian citizens and froze the entry of further foreign banks until 1996."We have found ourselves in an awkward situation, especially with the council of the European Union," Gerashchenko said.The restrictions have angered foreign bankers, who said they would block access to lucrative deals in oil, gas and commodities. Many have quietly ignored them and dealt with Russian clients in anticipation that the restrictions would be scrapped.Economics Minister Alexander Shokhin told another press conference Tuesday that the easing of the restrictions would apply only to 12 foreign banks that had received licenses before the curbs. He also said that some limitations, including a restriction on trading bonds, would be maintained.Gerashchenko said the government is likely maintain a restriction under which the total capital of foreign banks in the country cannot exceed a certain percent of that of Russian banks. "I think such limitation must be maintained," Gerashchenko said.He said a restrictive policy toward foreign banks in Russia had caused difficulties for Russian commercial banks trying to open branches abroad.(MT, Reuters)