Moscow: The Chairman of the State Development Corporation VEB.RF Igor Shuvalov today termed as “challenging”, the prevailing conditions at Russia’s “most important” development institution, Vnesheconombank. The Vnesheconombank group has over 4 trillion in assets and its credit portfolio exceeds 1.5 trillion.
“The conditions today are challenging,” Shuvalov said.
The large-scale sanctions against the Russian banking sector and since February 2022, he said he essentially had to build the infrastructure for cooperating with banks and customers from scratch. “But we succeeded. And I want to report that as of now, we have fully established cooperation with Russian and several foreign banks as well as with our clients,” he told Russian President Vladimir Putin today.
In his meeting with Putin Shuvalov said that the clients feared “secondary” sanctions but the problem was “resolved” using the data transfer system provided by the Central Bank. “We often provided services in dollars and euros, especially when transactions concerned export or import. Now we operate exclusively in rubles. We also operate with the currencies of friendly countries but we conduct no euro or dollar transactions,” he told Putin.
He said there was “great interest” in the Central Bank’s data transfer system, and claimed that even before the sanctions, “we promoted this system, guided by the principles of partnership in the [Shanghai Cooperation Organization] SCO’s inter-bank association when Russia presided in the SCO”. He further added that several countries, including some members of the Eurasian Economic Union (EAEU), accepted the system.
Shuvalov said in cooperation with the Government and the Central bank, the VEB took all the necessary decisions concerning regulations and capital provision. “As per your instruction, the Supervisory Board decided to grant sureties worth 1.35 trillion rubles in favour of commercial banks. They have already received 860 billion and are now signing loan agreements with their borrowers. Loans amounting to a total of around 365 billion rubles have been issued to date,” he told Putin. He lauded Putin’s decisions as the “real measures of support”. According to him, this was how a development bank is supposed to function in a crisis. “VEB and the Government are being rather flexible, repurposing some sureties that have been granted in order not only to replenish circulating capital or satisfy other needs but also to consider investment projects,” he said.
Putin had announced at the 25th St Petersburg International Economic Forum on June 17, 2022, that it was important to support the Project Finance Factory and grant an additional 122 billion rubles of capital. Kremlin quoted Shuvalov saying these decisions have been made. “Right now, we are having discussions with the Government and the Economic Development Ministry on which new projects to launch in order to support the investment cycle in Russia in these difficult circumstances,” he told Putin.
He further elaborated, “First of all, we will deal with new industry projects. We are now living with completely different demands – for example, when it comes to our aviation equipment. The market demands a quantity of aviation equipment that requires the expansion of our current capacities”.
Top Photo: Igor Shuvalov with Russian President Vladimir Putin today. Photo courtesy Kremlin.ru
– global bihari bureau
