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By Anatoly Medetsky
To stabilize the crisis-strapped banking system, the Primorye Duma allowed the regional administration Dec. 28 to guarantee that two local banks will repay possible loans to the Central Bank of Russia. The "absolute majority" of the Duma, which is a vote-counting term, favored the decision, overriding the opposition of just one deputy. To complete the task, at its next session, the legislative corps will expand the amount of money that the regional administration can use as a guarantee, because the current amount of 825 million rubles ($39 million) has been 98 percent exhausted. In January, the deputies will also review what security the banks will offer. The Central Bank will issue stabilization loans to major regional banks next year, provided it has recovery guarantees from local administrations. The two banks, Dalrybbank and Primsocbank, are considered principal in Primorye, along with Far Eastern Bank, which already has such a guarantee. Dalryb, once the leading bank in the Far East, has made loans to 43 percent of Primorye's industry and accounts for 34 percent of all loans given out in the region. Primsoc, which is 52 percent owned by the state-run Pension Fund, conducts all pension-related payments and is vital for social security. Dalrybbank is asking for 180 million rubles ($8.6 million) to regain its financial footing after a backlash caused by the government's decision to freeze its bonds and by depositor panic. Dalrybbank has 120 million rubles worth of assets frozen in government securities and 45,000 depositors, the second largest amount after the national giant Sberbank. Primsocbank, is seeking 50 million rubles to arrange for timely payment of pensions in the situation when the ruble is rapidly devaluing. Dmitry Yarovoi, board chairman of the bank, said Primsoc could settle all its liabilities by the end of the year with no outside assistance, but that would be detrimental to retired people. "With their money today people can buy more than tomorrow," he said. Seventy percent of private accounts with the bank were in hard currency and after the ruble devaluation Primsoc's liabilities increased by 3-3.5 times. Now the bank owes its 2,500 depositors $1 million. Dalrybbank's largest shareholders are Tiger Securities with a nine percent stake and the Nakhodka Free Economic Zone with 8.5 percent; 53 percent of its stockholders are individuals. The bank has credited the region's high-profile companies such as the popular vegetable oil and mayonnaise-maker Dalsoya and the fishing giant Dalmoreprodukt. Dalryb General Director Galina Belyayeva agreed to put up as security a portion of the bank's seven office premises valued at 30 million rubles and a new office building now under construction worth 200 million rubles. She also said the bank would sell off half of the bank's property as a fundraising measure. Primsoc is offering as security its office building valued at 22 million rubles, a portfolio, and cars and computers. One deputy spoke against shoring up failing banks with the Central Bank's money. The lawmaker, Yury Rybalkin, said the banks should have been wiser in their past policies of playing with suspiciously lucrative government bonds. "The Central Bank created this problem, but the players were too greedy," he said. "The luxury in the banking sphere catches the eye of all the people."
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