Russian President Vladimir Putin called on the country's banking sector to merge and strengthen its capital base, warning that financial institutions had little time to become competitive before Russia joined the World Trade Organization. Speaking to an advisory body called the State Council, Putin described the sector as underdeveloped and said foreign banks had captured roughly 40 percent of the market.
Nearly half of Russia's 140 million citizens, Putin said, remained outside the banking system entirely, a situation he called unacceptable. The country has only 1.1 bank branches per 10,000 people, about one-fifth the European Union's rate, and fewer than one in 10 Russians holds a credit or ATM card.
The head of state-controlled Sberbank said Putin had directed his cabinet to channel pensioners' funds into banks to boost liquidity. Putin also said the postal service and Sberbank would be used to extend financial services across Russia's vast territory.
WTO membership complicates the picture. A recent preliminary agreement between Russia and the United States deferred the question of financial services access, but the issue is expected to return when Russia finalizes terms with the trade body's 150 members. Moscow currently requires foreign banks to establish local subsidiaries before operating in Russia.
Historical summary. TurkishPress restated this wire report, first published in November 2006, in its own words.