The Central Bank of Russia liquidated nearly 100 credit organizations in 2016, and closed nearly 300 banks over the past 3 years during an unprecedented clearance of the banking sector.
Perhaps this is just the beginning. Nearly 600 banks still remain in the Russian Federation, however, according to Fitch Ratings analyst Alexander Danilov, even 10% of this number would’ve been enough for a country like Russia (considering the population). Revitalizing of the banking system is currently a priority for the Chairman of the Central Bank of the Russian Federation Elvira Nabiullina.
“Currently, almost a half of the existing banks have a capital deficit,” says a leading expert of the Center for Macroeconomic Analysis and Short-Term Forecasting Mikhail Mamonov.
According to his calculations, the lack of capital in the banking sector can reach 3 trillion rubles (approx. $50 billion), or about 3.5% of the GDP. This is almost twice as much as the Central Bank of Russia has spent on clearing the sector in the last 3 years.