The Deposit Insurance Agency is preparing to submit a reform package to the State Duma on the liquidation of collapsed banks.
According to the DIA’s director, Yuri Isaev, the agency “…is currently engaged in the liquidation of 321 banks: the book value of their assets is 3.78 trillion rubles, and the estimated value is 0.44 trillion (! -ed) rubles.”
In addition, he says, it currently takes about three years to fully liquidate a bank.
In the past few years, “…the number of banks that have [been placed] under the management of the DIA has grown rapidly, the process is lengthy, and with time the assets… [lose value], and as a result, creditors get less.”
After revoking a banking license, the DIA takes over a few months later, “… and the sale of assets begins at least a couple of years [after that].”
Therefore, Isaev says that the DIA is putting forth a proposal “…to amend the law in order to improve the [agency’s] efficiency….”
“Immediately after the license is revoked, it [the DIA] will assess the quality of the assets, allocate and prepare them for sale.”
“…this will shorten the term of liquidation of the banks to one and a half years and make the process more transparent.”
“The idea is to abandon the endless judicial procedures, which, for the most part, do not bring about the expected result, and [instead] focus on a quick, public, and effective sale…” before the assets depreciate.
In addition, he added, assets that were stolen from banks due to the criminal actions of the management or owners, will not be put up for sale…
…information about them… will form the basis of the application to law enforcement bodies [for prosecution].
The DIA does not plan to sell good assets for “quick cash” either, Isaev says.
Isaev hopes that the proposed reform will help not only increase revenue… but also reduce the costs of asset maintenance.
He claims that the CBR and the government support the DIA’s proposed reforms. Their amendments “…will be ready in January, so that the Duma can consider them in the Spring session.”