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Russia banks may need $16 bln extra provision by '10

Fri Jul 10, 2009 4:58am EDT

MOSCOW, July 10 (Reuters) - Russian banks may have to channel up to 500 billion roubles ($15.68 billion) into extra provisions at the start of 2010, when a temporary relaxation of reserves rules expires, the central bank data showed on Friday.

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Russia's 1,100-plus banking system has been badly hit by the stock market collapse and the deterioration of asset quality in the second half of 2008. This forced the central bank to ease controls on provisions against doubtful loans.

"The savings (due to the eased regulations) may amount to 400-500 billion roubles by the year-end. In fact, these savings are postponed expenses," the central bank's chairman Sergei Ignatyev said in a report to the National Banking Council, a copy of which was obtained by Reuters. (Reporting by Dasha Korsunskaya; writing by Dmitry Sergeyev; editing by Maria Kiselyova)

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