Prime Minister Vladimir Putin met with Sberbank President German Gref
22 december 2008
Transcript of the start of the meeting:
Vladimir Putin: Mr Gref, we have recently had many discussions concerning the various economic branches and made numerous decisions. You have taken part in those meetings. We have made it clear that you, too, will advance initiatives concerning new forms of work with private clients. In particular, we have mentioned the prospects of prolonging certain loan agreements-and you have promised to make relevant calculations to prevent damaging the bank and support its Russian clients at the same time. What can you say on this issue?
German Gref: Mr Putin, we have been actively discussing problems related to private loans and creditors' debts and making necessary calculations for two weeks since we received your instruction. We have fully stabilised the situation. There are no private deposit problems, and the bank has not cut the scope of depositing and currency exchange. We have completed all preparatory work on your order concerning loan policy. The bank Board made a decision on Friday concerning the three key problems of private loans.
First are mortgage loans. Those of our clients who are dismissed with personnel reduction or otherwise see their incomes shrinking dramatically should submit relevant papers to enjoy payment postponements or pay in instalments on 6-12 month terms before previous incomes are regained. All Sberbank territorial branches and Moscow offices will grant those services, which envisage either interest capitalisation or another convenient way of postponing payments for each particular client. Decision-making on such postponements and extensions is up to the creditors.
Second comes the tricky issue of currency exchange. There are very many foreign currency loans now, and many private clients have recently requested them converted into roubles. We have made an appropriate decision, and will do so starting next year.
Vladimir Putin: So the people who loaned foreign currency can have their loans converted into the rouble equivalent?
German Gref: That's right. The bank will convert dollars, Euros, and any other currency into roubles on its internally accepted exchange rate.
Vladimir Putin: If the clients so wish.
German Gref: We will do so based on their applications. Exchange will be granted to all applicants. As for postponements and extensions, they will be granted after the client's employer confirms the loss or sharp shrinkage of the client's income.
Vladimir Putin: Why do clients want to convert their foreign currency loans into roubles?
German Gref: You see, a majority of the population has no foreign currency incomes. These clients risked currency exposure when the rouble rate was going up. Now they see their blunder and are in jeopardy, with no foreign currency incomes. We are ready to shoulder the burden.
Vladimir Putin: OK. What's your third problem?
German Gref: It's mortgaging. We have made a final agreement with the Agency for Housing Mortgage Lending and other representatives from key banks with the largest share of the mortgage market to offer three options for rescheduling mortgage loans. It concerns clients whose incomes are shrinking drastically. A relevant decision has not been made yet because it requires a Government resolution. However, we have worked all the three options out, coordinated them with all concerned, and submitted them to the Finance Ministry for approval. I hope the resolution will be made before January.
Vladimir Putin: What should it be?
German Gref: We expect the bank to be authorised to reschedule mortgage loans and extend instalments for 12 months under the guarantee of the Agency for Housing Mortgage Lending.
Vladimir Putin: That's just what we proposed.
German Gref: We envisage another option-the bank offers the client another 12-month loan amounting to his mortgage loan plus interest, with Mortgage Agency guarantees. That will enable the debtor to pay the first loan out of the second.
Vladimir Putin: That's good.
German Gref: I think all those arrangements will start working on January 1, and major debtors will have their troubles put off for at least a year.
Vladimir Putin: As you see it, only people who have lost their jobs or a major part of their earnings should be entitled to prolongation of previously made loans. Is that so?
German Gref: Both categories, Mr Putin.
Vladimir Putin: OK.