Transcript of the beginning of the meeting:

Vladimir Putin: It's been a short time since our previous meeting, which was also attended by your colleagues, the Central Bank Chairman and the heads of the Government ministries and agencies dealing with the economy.

Developments in the banking sector have been significant and also promising, as the Minister of Economic Development has just said. Does your ongoing work reflect these positive changes?

Pyotr Aven: Yes, it does. The banking sector is now sustainable, which is good news, since the amount of available credit decreased both in the retail and corporate sectors before this summer. The amount of available credit is now being maintained at the same stable level, and is on the rise in critical sectors of the economy. This is primarily reflected in consumer crediting.

As for our bank, the amount of credit extended to consumers has risen by 22% since the beginning this year. This growth has been especially noticeable in recent months. In August, Alfa-Bank gave out 100,000 consumer loans, whereas we had given out an average of only 50,000 consumer loans before the crisis. So it's quite a leap forward. As far as the corporate sector is concerned, we now have to write off bad debts.

On the other hand, a lot of new loans are being given out: Since the beginning of this year, Alfa-Bank has given out new loans worth $12 billion, mainly to new borrowers in various industries, including civil engineering, the defence industry, the energy industry, transportation, and so on. And so the worst is already behind us, and, judging from our bank's performance, we can hope for a recovery. I believe ordinary people also share this hope.

The amount of individuals' deposits in the bank has been increasing quickly, growing by 58% this year. Interestingly, since the beginning of the summer the portion of deposits in roubles has been increasing quickly, which is a testimony to people's trust in the rouble, something they lacked last autumn. All this gives us hope and optimism.

Vladimir Putin: What about irrecoverable, or so-called "toxic" loans?

Pyotr Aven: Of course there are such loans. We have been writing them off very aggressively. But first of all, we increased our capital assets, using our own reserves and the subordinated loans we received. So we now have the opportunity to replace the bad loans, write them off very aggressively, and build up the necessary reserves to protect the bottom line. I think in the near future our balance sheet will be almost clear.

Vladimir Putin: You anticipated my next question. I wanted to ask about your relationships with the Central Bank and the Government. Are you feeling their support?

Pyotr Aven: In my view, the Central Bank, the Government, and all financial authorities' anti-recession policies have proved very effective. The banking system no doubt received the support it needed.

I still believe that there is a shortage in capital, and the system needs to be capitalised. Targeted measures need to be applied. For instance, we think it would be prudent to extend ten-year subordinate loans to 30 years. This would be simply a routine matter. Almost no extra resources will be needed. I don't think that any groundbreaking decisions need be made. From my point of view, the Central Bank and the Ministry of Finance supported us a lot, which was very important.

Vladimir Putin: How much did Alfa-bank receive in subordinate loans?

Pyotr Aven: We allocated 30 billion roubles from our assets and received 10 billion roubles from the Central Bank. We are going to allocate another 10 billion roubles shortly, and we expect another 30 billion roubles from the Central Bank as well.

Vladimir Putin: So, this will be the third stage, just as we arranged it, right?

Pyotr Aven: Yes.

Vladimir Putin: Good.