RUSSIA: ONE ONF RUSSIA'S LARGEST BANKS - GUTA BANK, IS UNABLE TO PAY PRIVATE DEPOSITORS

Record ID: 566296

  • Title: RUSSIA: ONE ONF RUSSIA'S LARGEST BANKS - GUTA BANK, IS UNABLE TO PAY PRIVATE DEPOSITORS
  • Date: 7th July 2004
  • Summary: (W5) MOSCOW, RUSSIA (JULY 7, 2004) (REUTERS - ACCESS ALL) 1. VARIOUS OF GUTA BANK HEADQUARTERS 0.16 2. VARIOUS OF DEPOSITORS STANDING OUTSIDE GUTA BANK HEADQUARTERS 0.29 3. SLV WOMAN WALKING INTO BANK / GUARD STANDING BY DOOR 0.38 4. VARIOUS OF PEOPLE STANDING OUTSIDE BANK LOOKING AT FORMS 0.49 5. SLV WOMAN STANDING OUTSIDE BANK NEXT TO BANK SIGN 0.55 6. VARIOUS OF PEOPLE OUTSIDE BANK 1.19 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 22nd July 2004 13:00
  • Keywords:
  • Location: MOSCOW, RUSSIA
  • Country: Russia
  • Reuters ID: LVA7ARNM4BOFJJA96B7MQOYZB3HD
  • Story Text: Guta-Bank, one of Russia's 20 largest banks, is
    unable to pay out to private depositors.



    Guta-Bank, one of Russia's 20 largest banks, was
    unable to pay out to private depositors on Wednesday (July
    7), giving a further sign of instability in Russia's
    banking sector.

    "Due to an outflow of funds in June exceeding 10
    billion roubles ($344 million) and a significant increase
    in payments in July, Guta-Bank is unable to carry out
    current payments and complete payments on deposits," read a
    note tacked to the door of a city centre branch.

    Guta-Bank's press service confirmed the note was
    authentic and said it would make a statement soon.

    "Guta-Bank management is now taking necessary measures
    to restore current liquidity of the credit and finance
    organisation," the note said.

    The banking community was shaken last month by the
    closure of two small banks, one put into liquidation by the
    central bank on suspicion of money laundering and another
    after a run by depositors.

    Rumours that a "blacklist" may exist of more banks
    facing closure, further hurt sentiment, forcing banks to
    close limits on each other and the central bank to boost
    liquidity in the sector by easing reserve requirements.

    But in a new sign of instability Dialog-Optim bank,
    which says it is Russia's 17th biggest in terms of private
    deposits, stopped taking new deposits on July 1.

    President Vladimir Putin has intervened twice, once
    telling the central bank to be careful in its actions and
    later telling businessmen there were no grounds for concern
    and supporting the central bank's decisions.

    Russians have vivid memories of the damage a failing
    banking system can cause. Just six years ago, a financial
    crisis drove the economy to the brink of collapse and many
    banks to the wall, wiping out the savings of thousands of
    ordinary citizens.

    Since then, the economy has boomed, but the banks are
    now on a lending spree in a poorly regulated market.

    The demons of the past have been revived by the recent
    spate of bad news about the banking sector.

    Analysts said the turbulence which started with minor
    banks was likely to spread further to large banks.

    The central bank plans to boost the banking sector's
    stability by launching a system of deposit insurance to
    qualify for which banks must report their true shareholder
    structure and financial data to International Accounting
    Standards.


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