The State Duma, parliament's lower house, passed a respective amendment to the private deposit insurance act last July, at the peak of a Russian banking crisis. It entered into force today to rob new Savings and other government banks' clients of government guarantees. Deposits opened before October 1 will have guarantees before the start of 2007, says the Finansovye Izvestia.
This is a just arrangement-it formally removes government banks' competitive head start, says Dmitri Lepetikov, executive manager of the Development Centre economic research foundation. The Savings Bank will eventually lose some of its dominance with private depositors. It currently has 61 per cent of Russia's privately deposited money, and its experts, who proceed from rough estimations, do not think its share will drop to 50 per cent within the two next years.
75 to 80 per cent of Savings Bank deposits do not exceed the ceiling 100,000 roubles, says Igor Lavuschenko, Prospect investment company analyst. "Saving Bank dominance in the market will subside with time-but not to its detriment, considering big service costs with private deposits. I think the bank is deliberately cutting its share of private deposits to enhance presence in the corporate deposit market."
The Savings Bank of Russia was registered June 20, 1991. The Central Bank of Russia, its founder and basic holder, possesses more than 60 per cent of its shares. There are more than 200,000 other holders, private and corporate alike.
