The Moscow Times reported that Mr Vladimir Putin Prime Minister of Russia proposed that Vneshekonombank lend RUB 75 billion to Gazprombank, the second biggest subordinated loan from VEB since the recession began.

Mr Putin said “It is proposed to provide a subordinated loan to Gazprombank worth RUB 75 billion. He said that Gazprombank in return will have to lend the real economy the same money it is going to receive from the state.”

He added that Gazprombank and the other banks, which have received subordinated loans, must stick to previous agreements about the volume of lending.

Mr Vladimir Dmitriyev CEO of VEB’s said its current funds will not be enough to satisfy the demand for financing from the country’s banks. He said “The total amount of loan applications may bring us to a total deficit of funds of RUB 80 billion.”

VEB said in June that it may issue the next tranche of its foreign currency bonds in July for a total of more than USD 2 billion, but Mr Dmitriyev said Monday that the bank has no plans so far to come back to the local bond market.

The banker said the bank is considering a syndicated loan but has not determined its size yet

Mr Putin also proposed increasing the capital of VEB’s subsidiary Russian Development Bank, which focuses on lending to small and medium enterprises, by RUB 10 billion.

(Sourced from The Moscow Times)