12:15, 12 October 2022 Page views 791 views

Ministry of Finance wants to increase number of banks in Russia

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According to him, the old principle “small is great” is relevant now.

He attributed the need to increase the number of banking market participants to the sanctions already imposed and new restrictions that may follow.

“There are exactly as many banks as the economy needs. However, with all other things being equal, I would say that we, probably, need more banks now than before the pandemic, because sanctions lay certain types of economic activity, including payment activity, under a necessity of segmentation. In this sense, the old principle “small is great” can now be implemented, because concentration creates risks,” the official noted.

According to him, the consolidation in the banking sector attracts attention of the authorities of Western countries, who imposed sanctions against Russia. “Our position, the position of economic government agencies lies in the fact that now it would be wrong to concentrate some economic activities in one place. In so doing, we make things easier for our frenemies from OFAC,” Moiseev explained.

According to the Bank of Russia, 362 credit institutions, including 328 banks, were operating in the country as of October 1. Since the beginning of the year, seven banks and one non-bank credit institution have lost their licenses. In early 2020, before the coronavirus pandemic, there were 442 players on the Russian market. The number of the banking market participants has been declining since at least 2015, when intensive cleaning of the sector and massive withdrawals of licenses were launched in Russia.