MOSCOW, February 7 (RIA Novosti) - Russia will discuss the issue of admitting foreign banks' branches to its banking system at talks on its accession to the Organization for Economic Cooperation and Development (OECD), the Russian economics minister said Wednesday.
The OECD is a Paris-based think tank uniting 30 market democracies, providing a forum to address economic, social and governance challenges.
German Gref said the admission of foreign banks' branches to the Russian banking sector was the most sensitive issue at talks on Russia's accession to the World Trade Organization (WTO).
Russia has banned the opening of foreign banks' branches on its territory and managed to keep a 50% quota on foreign capital's share in aggregate banking capital, in an effort to develop the sector and limit capital flight.
Branches of foreign banks operate under legislation of the banks' home countries, and pay taxes to their home jurisdictions.
Russia holds observer status in the OECD, which was formed after WWII to oversee the Marshall Plan for Europe's reconstruction.
A senior economic official said on Wednesday that Russia will only allow foreign banks to open branches in the country after the Russian banking sector becomes viable and competitive.
"We will open the market when Russia's banking system becomes competitive, but as to when this will happen - in five or 10 or 15 years - this I do not know," said Maxim Medvedkov, director of the Trade Negotiations Department at the economics ministry.
He said Russia will retain the right to open up its banking market to foreign banks' branches at its own discretion, at any time as it deems appropriate.
Another official said foreign insurance companies will be able to open their branches in Russia if they meet the requirements set by the Economic Development and Trade Ministry.
Yekaterina Mayorova, head of the Ministry's Trade Negotiations Department Financial Markets Division, said: "They should have at least a five-year track record in the relevant field and at least eight years of experience as far as life insurance is concerned." Their aggregate assets should be at least $5 billion, she added.
She also said that after Russia is admitted to the WTO, it may limit the share of foreign investment in the capital of certain publicly-traded companies to 25%.
