Russia to offer $26 bn rescue package for beleaguered banks

October 18th, 2008 - 2:04 pm ICT by IANS  

Moscow, Oct 18 (RIA Novosti) Russia’s central bank will place a financial rescue package of up to $26.6 billion in unsecured loans Monday to bail out banks from the ongoing liquidity crisis.Only banks rated by the international agencies Fitch Ratings, Standard & Poor’s and Moody’s Investors Service will be able to apply for the six-month loans.

The relief package and the eligibility criteria were approved by the Russian parliament and signed into a law Friday by President Dmitry Medvedev.

A government source said around 120 banks would be able to apply for the bailout.

He said the government was only prepared to protect the country’s key banks, and that the state might go for larger stake in some of the banks.

The finance ministry has previously held similar auction, with around $30 billion already disbursed.

Apart from the rescue package, the country’s largest state-run bank Sberbank will receive a $19 billion loan from the central bank, with the first tranche of $5.7 billion expected to be transferred next week, an insider said.

“The agreement has been signed. The funds are likely to be transferred next Tuesday or Wednesday,” the source said.

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