Private banks unable to compete against state banks under current regulations - Dmitry Ananyev
ST. PETERSBURG. July 12 (Interfax) - The majority of private banks in Russia will be unable to compete with state banks under current regulations, the first deputy chairman of the Federation Council's committee on the budget and financial markets, and co-owner of Promsvyazbank, Dmitry Ananyev, said at the St. Petersburg International Banking Forum.
He said: "Domination in the financial sector will continue to kill competition and, inevitably, in the short or midterm, cause losses to the competitiveness in our banking sector and its degradation. In my view, nobody can compete with state banks even in the midterm if our current model and regulatory environment continues to develop."
He said that the chances of gaining an equal footing with state banks would only be possible for banks with experience in effective retail operations. "I think that chances will be there for only the most agile and energetic small banks, which have learned to sell highly marginal retail funds correctly. But this is clearly usury," Ananyev said.
Ananyev said that micro-financing organizations, for instance, might be able to survive competition with state banks.
In order that regional banks can operate, for instance, in lending to small and medium-sized business, the regulatory environment should be changed, Ananyev said. He added that among official decision-makers, a competitive mentality should be developed as opposed to a more conservative attitude. "In terms of officials, the "at least nothing bad happened" attitude is more preferable than attempts to install innovations, take risks and personal responsibility," he said.