Elvira Nabiullina, сhairman of the Russian Central Bank, said that overwhelming number of banks with weak credit history were removed from the market.
"Overwhelming number of weak banks were removed from the banking market," TASS quoted her as saying. "This measure will help development of healthy competition."
In addition, she noted that the number of large credit institutions in the banking sector and banks that receive state assistance is quite high, which has an impact on competition. "Of course, this worries some of those in the banking sector," Nabiullina noted. At the same time, she added that development of technologies increases competition in the banking sector.
Deputy Chairman of the Central Bank, Vasily Pozdyshev, said that massive revoking of licenses in the Russian banking sector is coming to an end. "Massive phase of revoking is slowly coming to an end. We're approaching the stage of financial rehabilitation in the banking sector," Pozdyshev stressed.
Professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, sain in an interview with Vestnik Kavkaza that results of this "clean-up" are pretty ambiguous.
"There are less banks, the most risky banks were eliminated from the market, either reorganized or liquidated. Overall, it's a positive thing, but it's necessary to understand that saying that banking system has become stronger and that it's ready for serious economic problems is impossible right now. We have to see how will current system work in real economy under new conditions. We can't be too optimistic," he said.
Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, drew attention to the most important negative outcome of this "clean up". "Over 500 banks lost their licenses, including many small provincial banks. In other words, the regional banking system was almost destroyed. By closing regional banks, the Central Bank deprived regions of access to loans and some services. Sberbank expands as much as it possibly can, but it can't cope with current situation," he noted.
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