ST. PETERSBURG, June 13 (RIA Novosti) - Russia will not allow foreign banks to open branches in the country, the country's deputy prime minister said Tuesday.
In an attempt to protect its weak banking sector, Russia only allows foreign banks to open subsidiaries - which are accountable under Russian law - in the country, and not branches, which fall under the jurisdiction of the banks' home nations.
Alexander Zhukov told an economic conference in Russia's second city that Russia had come under pressure to grant foreign banks direct access to its banking markets, but said Russia would maintain its position.
"We will not go down the road of opening direct branches of foreign banks in Russia," he said.
Zhukov also said Russia should adopt a balanced approach to protect domestic producers of agricultural equipment, but added that customs tariffs should be low enough to allow high-tech foreign-made machines to enter Russia.
Foreign Minister Sergei Lavrov said June 2 that the United States was making excessive demands on Russia's financial system in bilateral talks on the former Soviet republic's bid to join the World Trade Organization.
Russia has completed talks on WTO admission with all countries except for the U.S.
Russia has consistently said that its financial sector is still too weak to withstand direct competition on its own market from branches of foreign banks and other financial institutions. The U.S. has been pushing for its banks to be allowed to open branches in the country.
