1 Nov 2010 16:59

Averaged top ruble-deposit rate at top-10 Russian banks 8.5% in Oct - CBR

MOSCOW. Nov 1 (Interfax) - The average of top interest rates on deposits in rubles with the ten Russian banks that take in the most deposits remained at 8.5% in the latter part of October, as it was in early and mid-month, the Central Bank of Russia's external and public relations department said.

The CBR began monitoring the websites of the ten leading banks by volume of private-citizen deposits at the start of July 2009.

Over this period the rate has dropped by 6.52 percentage points from a top 15.02% in the middle of July last year to this October's lowest point. Since this year began, the rate has gone down 4.68 percentage points from 13.18% in the latter part of December.

Over the month of September, the averaged rate also went unchanged at 8.73%, after decreasing from 8.78% in the first third of August to 8.74% in the last third.

The ten banks whose sites the CBR is monitoring are Sberbank of Russia , VTB 24 , Bank of Moscow , Raiffeisenbank, Gazprombank, Rosbank , Alfa Bank , Uralsib , Promsvyazbank , and MDM Bank.

In determining its approach to figuring the average level of top interest rates on private-citizen deposits, the CBR proceeded on the basis that around 70% of all deposits in the country went to the top-ten lending organizations. The Central Bank view is that the average interest rate calculated for the ten largest banks best reflects the size of the market interest rate.

The CBR more than once expressed disquiet over the aggressive deposit rate-hiking that took place in the spring and summer of last year, as high rates on deposits affect conditions for lending to the real sector of the economy, and also increase risks for banks themselves if inflation and credit rates go down.

The Central Bank recommends that banks' average deposit interest rates do not exceed the averaged maximum rate for ruble deposits with the ten largest banks by more than 1.5 percentage points, suggesting that this deviation makes possible an acceptable level of competition in this sector of the market while at the same time keeping interest risks at a moderate level acceptable to banks.