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    RUSSIAN BANKS: IMPROVEMENT NOT FINAL, WARN EXPERTS

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    MOSCOW, July 15 (RIA Novosti) - Russia has got down to streamline its banking network, so bankers are in for more predicaments, warn investment company analysts.

    Banking tensions are subsiding a bit after two suspense-laden months. The interbank credit market is reviving, the rouble is rising vs. the US dollar after a recent boom at the exchange and in street booths, and fewer private depositors are anxious to withdraw their money.

    Bankers are not to relax, however. They will face many more problems with an emergent finance reform to drastically cut a bloated number of Russian-based banks. An end will come to dubious and "grey" banks within this year or next, forecast experts.

    Accounting checks for the first half-year are over, and information will reach the Central Bank of Russia, August or September, to see which banks deserve to join a budding deposit insurance net, and which ought to be unlicensed.

    "The check will enable the Central Bank to take thorough stock of accounting and business arrangements, so many banks will meet quick though painful death," Alexander Razuvayev, MegaTrustOil head expert, grimly prophesies. "That will not be a crisis but sanitation. Russia's banking needs a big and prompt clean-up."

    Survival of the fittest is coming onto its own. Here, the Central Bank will be a wolf in the woods, he figuratively remarked.

    "Big banks will be alone to survive, and they'll come out of it with bigger capital and assets. They will become more reliable and transparent, and emerge as pillars of Russian economic progress."

    Pavel Mamai, Renaissance Capital analyst, does not think the current liquidity crisis has psychological roots, while many track it down to panic-breeding bad news. "Russia's entire banking system is too weak-that's the real reason. A small bank was unlicensed, and the whole network came down. Hardships obsess Russian banks-weak monitoring, legislative problems, inadequate law administration, clientswary of their banks and bankers suspicious of each other. Utter lack of confidence rocks liabilities."

    True, he went on, the Central Bank is an efficient troubleshooter and has started the job in time to cope with the crisis-but it is dealing with the effects not causes, "so another similar crisis will come quite soon", possibly, next year.

    Mr. Mamai does not think Russian finance is in for more big upheavals-"the Central Bank has clearly shown it doesn't want an avalanche of bankruptcies. It wants things to calm down smoothly, and has every chance to promote the prospect."

    The crisis is over, and depositors see the Central Bank can cope. "I think they'll be now bringing their money back to banks," the expert summed up his point.

    "Present-day Russia has roughly thirteen hundred banks-as against a hundred, which is the best possible amount for a national economy. So we are to rejoice as the Central Bank has come out to bolster banking and get it into order," said Alexander Razuvayev.

    To make the "grey" economic sector shrink is the duty of whatever national economic authorities. The number of banks who serve that sector will certainly go down, but small and medium-scale provincial banks, who are loaning to small businessmen and have no contacts with 'greys', will not suffer, he reassured.

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