OREANDA-NEWS. March 26, 2009. Vnesheconombank intends to change the terms for extending subordinated loans, which will make possible to unfreeze the program for recapitalization of banks and allocate the remaining RUB 200 bn.

Initially VEB began to issue banks subordinated loans with the proviso that these financial resources be used for lending to the real sectors of the economy and banks’ shareholders to replenish capitals by amounts equal to the subordinated loans granted. A subordinated loan itself, under the current regulations, cannot exceed 15% of a bank’s share capital.

Bankers have frequently complained that overly strict requirements for banks seeking subordinated loans from the state limit the range of potential borrowers, since at the height of the crisis most bank shareholders are unable to make such substantial cash injections. VEB CEO Vladimir Dmitriev said Wednesday his bank suspended the issue of new subordinated loans as a new lending procedure is being worked out. “Implementation of the program is slightly behind schedule,” he said.