Russia’s bankers, with great concern, are awaiting the outcome of the Kirienko confirmation hearing. Uppermost in their minds are decisions over the allocation of budget funds and possible changes in the terms of the Rosneft sale. Even though the system of "authorized banks" was supposed to have been abolished by the end of 1997, government funds are still channeled through commercial banks. The allotments are made by a credit policy commission chaired by First Deputy Prime Minister Boris Nemtsov. (Kommersant-daily, April 3)
With the approach of the spring sowing season, a long-running feud over the allocation of state farm credits is also coming to a head. Last year, credits were distributed through SBS-Agroprombank and Alfa-Bank. According to Deputy Agriculture Minister Leonid Kholod, Agroprombank has defaulted on 700 million rubles ($115 million) of credits — which were to have been repaid by March 18. Alfa-Bank also owes 1 billion rubles of farm credits, due by April 8. (Russky telegraf, April 1, Finansovye izvestia, April 2)
Aleksandr Smolensky, the head of SBS, blames the government for having delayed releasing the credits until late in 1997. Smolensky is also unhappy with the fact that the 7.4 billion rubles of farm credits for 1998 were distributed to twelve banks through an open tender in December 1997. When the Moscow-based SBS bought the former state-owned Agroprombank in 1996 it hoped for exclusive rights to distribute farm credits through its unparalleled network of 1700 regional branches. The state share in SBS-Agroprombank has been diluted from 25 to 12 percent by new share offerings. SBS is now pushing for the creation of a new wholly-state-owned Russian Agricultural Bank to take responsibility for the credits, most of which go unpaid year after year.
Russian Diplomat Visits Belgrade.