RUSSIA TO MEET EUROPEAN DEPOSIT INSURANCE NORMS BY 2010-2012

ITAR-TASS News Agency
August 8, 2006 Tuesday 01:10 PM EST

The State Agency for Bank Deposit Insurance thinks that Russia will
meet European deposit insurance norms of 20,000 euros in 2010-2012,
Agency Director General Alexander Turbanov told a Tuesday press
conference.

As of now, Russia’s deposit insurance policies are higher than those
in CIS member countries. For instance, Armenia guarantees the return
of $5,000, Kazakhstan – $3,000, and Ukraine – $1,600.

Amendments to the Law on the Insurance of Individual Deposits at Banks
of the Russian Federation," which enlarge the insurance policy from
100,000 to 190,000 rubles, will enter into force on August 9.

That will enlarge the amount of compensations to $7,500.

The enlargement of insurance policies to 190,000 rubles is beneficial
to a number of banks, Turbanov said. In one-third of banks the
insurance policies of 100,000 rubles covered only 10% of individual
deposits, which was costly for banks. Now the number of such banks
will reduce to 40%, he added.

The agency will suggest the enlargement of insurance policies from
190,000 to 300,000 rubles in early 2007, Turbanov said.

"Depending on the formalities, the law may enter into force on July
2007 or later," he said.

The deposit insurance fund has reached 29.2 billion rubles. As of
July 1, 2006, the deposit insurance system incorporated 934 banks,
which are holding 346.7 million individual deposits. The amount of
individual bank deposits in these banks has grown by 377.6 billion
rubles or 13.8% since the beginning of this year.