Prime Minister Vladimir Putin visited the Novosibirsk regional branch of Alfa Bank, met with Alfa Bank President Pyotr Aven
The Russian Prime Minister criticised banks for setting exorbitant interest rates when lending the funds to other banks that were received from the government in the first place as part of an anti-crisis bailout package.
Mr Putin pointed out that when commercial banks accept interest free loans at the Central Bank or Vnesheconombank auctions, they too become government agents in a sense.
"This is why, I believe, your further actions at the interbank (lending) market should be consistent with the terms and conditions given to you when the government lent you the money. Overcharging with the interest is off-limits," he emphasized.
Mr Aven, in turn, said Alfa Bank was interested in maintaining the current level of government lending. "We do not borrow the money for ourselves but for our customers," Alfa Bank President said. "To channel it into non-financial sectors," the Prime Minister added.
The Prime Minister said the Bank of Russia had allocated 400 billion roubles to lend without interest through auctions, and planned a 950-billion rouble subordinated loan. "The Central Bank has assured us the amount will be enough [to overcome the financial crisis]. It also said they were ready to provide as much money as commercial companies need," he added.
Mr Putin and Mr Aven also discussed the advisability of converting the funds into dollars because many people prefer to keep their savings in foreign currency. The Prime Minister said it was not advisable. "The advantages are dubious, since we do not know what will happen to the dollar," he said.
During the Prime Minister's visit to Alfa Bank's regional office, Mr Aven showed Mr Putin the bank's operation, including the Mobile Banking service which enables customers to make transactions from their mobile phones. Mr Aven also showed the Prime Minister how people can pay their housing utilities through Mobile Banking. Mr Putin praised the bank's innovations.