Draft Law on VEB's Capitalization Approved at Government Meeting
OREANDA-NEWS. A Draft Law introduced by the Finance Ministry on Vnesheconombank's additional capitalization was approved at a Government meeting.
The Federal Draft Law "On Introducing Changes in Article 9610 of the Russian Budget Code" provides for a possibility to place up to 7% of financial resources of the National Wealth Fund on Vnesheconombank's deposits.
The Federal Draft Law "On Introducing Changes in articles 3 and 19 of the Federal Law "On the Bank For Development" proposes to establish:
* the right for Vnesheconombank to raise financial resources of the National Wealth Fund to place them on its deposits under the procedure and on the terms to be determined by the Government;
* the right for Vnesheconombank to raise financial resources of the National Wealth Fund on the basis of certain decisions by the Government for a tenure of no less than five years provided that appropriate deposit agreements do not contain provisions that directly or indirectly give the right to claim for early deposit repayment or its part as well as early interest payment for using deposit or early termination of deposit agreement;
* the procedure for the claim for deposits raised by Vnesheconombank.
Additional capitalization of Vnesheconombank is associated with the need to maintain its financial solvency whose key indicator is capital adequacy ratio. Meeting a capital adequacy ratio of at least 10% is a pre-requisite for raising funds on capital markets on the terms acceptable for the Bank.
Re-registration of the deposits will make it possible for Vnesheconombank to increase its capital by about 220 billion rubles (unadjusted for potential fluctuations in the dollar exchange rate). The rated value of capital adequacy ratio will amount to 11-12% by the end of 2014.
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