UPDATE 1-Bulgaria's central bank reopens Corpbank for debt repayments only
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SOFIA Aug 15 (Reuters) - Bulgaria's central bank has allowed some banking activities to resume at Corporate Commercial Bank (Corpbank) so borrowers can repay loans to the country's fourth-largest lender, officials said on Friday.
The bank was hit by a run on deposits in June that led to Bulgaria's biggest banking crisis since the 1990s. Corpbank was placed under the control of the central bank and has since remained shut pending an audit into its books, due to be completed by October, leaving angry customers without access to their deposits.
While the deposits remain frozen, branches of Corpbank nevertheless have reopened for normal working hours to allow borrowers to pay back outstanding loans, a spokeswoman for the central bank told Reuters.
"There are many people and companies that wish to pay back their loans to Corpbank ... as they do not want to pay interest ... and there is no reason to not allow them to do that," she said.
"These are normal banking operations ... these operations will not hinder the work of the bank's administrators," she added.
There is still no solution in sight on what Bulgarian authorities will do with Corpbank. A rescue package put together by the central bank and the previous Socialist-led government was derailed by a lack of political consensus in July.
A caretaker government appointed by the president took office in August and will govern until elections in October. The president said no action could be taken on Corpbank until the results of an audit ordered by the central bank are known, around the middle of October.
The interim finance minister on Thursday threw his weight behind a market solution to Corpbank that did not involve state funds, a statement said, after the minister met with a group of experts to discuss the issue.
Bulgarian prosecutors said on Tuesday they had charged the main owner of Corpbank, Tsvetan Vassilev, with embezzlement and an international warrant had been issued for his arrest.
Clients unnerved by reports of alleged shady deals involving Vassilev withdrew more than a fifth of deposits in a week-long bank run, forcing the central bank to shut down its operations.
Vassilev, who was locked in a public feud with a rival at the time of the run, has repeatedly denied any wrongdoing and said the run was a plot hatched by his competitors. He has also previously accused elements of Bulgaria's prosecution service of plotting against him. (Reporting by Angel Krasimirov; Editing by David Goodman and Greg Mahlich)