Russia to soften state guarantees rules -paper

MOSCOW, May 15 (Reuters) - Russia has revamped plans for state guarantees for key companies’ debt, making it easier for banks to claim money from the government, in a bid to encourage them to lend to the real economy, Vedomosti reported on Friday. Under the revised plan, creditors can apply to the Finance Ministry for money if their debtors do not reply to payment demands within 30 days, the business daily reported, citing Deputy Finance Minister Dmitry Pankin.

Previously, creditors first had to claim and sell off the loan collateral before they could apply for state cash -- a mechanism based on a subsidiary liability principle.

Banks found the scheme too risky, and Russian President Dmitry Medvedev earlier this week slammed it as a “failure”, noting that none of the allocated 300 billion roubles ($9.38 billion) had been claimed [ID:nLD833306].

Medvedev called for the guarantee plan to be revamped under a joint liability principle, which means banks can go directly to the state if a company defaults and recover the debt faster. The revised plan, which the Finance Ministry has submitted to the Justice Ministry, stops short of joint liability, but bankers have indicated that the terms are acceptable to them.

“It (the new scheme) is a subsidiary liability in a softer form, because the Finance Ministry will accept the creditor’s demand only after he has applied to the debtor,” Vedomosti quoted Pankin as saying.

The scheme will be funded with the previously allocated 300 billion roubles, and around 300 companies are eligible. “That is a normal guarantee,” Rosselkhozbank board chairman Yury Trushin told Vedomosti.

Igor Kogan, head of Orgresbank, agreed: “Then we will be able to see the companies’ risk as sovereign risk, and that will enable us to lend to enterprises at lower interest rates.” (Writing by Toni Vorobyova, editing by Will Waterman)