Support The Moscow Times!

Crimean Banks Offer Highest Deposit Interest Rates in Russia

Despite paying high deposit interest rates, Crimean banks are not operating at a loss.

Deposit interest rates in Crimean banks are around 3 percent higher than in the rest of Russia as the banks adjust to new conditions following the region's annexation by Russia last March, news agency RBC reported Wednesday.

Clients of Crimean banks received a 14.2 percent return on average for deposits with a term of up to a year and 12.7 percent for the deposits above one year, according to the data published by the Central Bank, RBC reported.

Depositors in the central federal district, one of 9 federal districts in Russia, received the highest rate outside Crimea with 11.8 percent and 11.1 percent respectively, the Central Bank said.

The difference is partly due to the banks' fight to attract Crimean depositors used to the more favorable conditions offered by Ukrainian banks, RBC reported, citing Alexei Buzdalin, chief expert at the Interfax Center for Economic Analysis.

Another reason for high deposit interest rates in Crimea is that the Ukrainian banks that left following the region's annexation by Russia were mostly replaced by small Russian banks.

Small banks tend to offer high rates in order to build trust among their local depositors, Buzdalin said.

As of April 1, 530 bank branches of 18 Russian banks were operating across Crimea, according to data from the Central Bank. No large state-owned or private banks, which generally offer lower interest rates, were represented on the peninsula.

But despite paying high deposit interest rates, Crimean banks are not operating at a loss — they make up for high deposit interest rates with even more expensive loans, Buzdalin said.

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysiss and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more