OREANDA-NEWS. July 8, 2009. At the meeting, Mr Putin and Mr Shuvalov discussed bank lending in July and loans in the next two months: August and September.

Transcript of the beginning of the meeting: Vladimir Putin: Shall we start with the banks first?

Igor Shuvalov: Mr Putin, you instructed us to discuss questions regarding loans for July and lending in the next two months - August and September - with state-owned banks. We were to ensure that state-owned banks could lend an additional 500 billion roubles by September 1, 2009.

Vladimir Putin: Not only state-owned banks, we should encourage privately owned banks, too. Of course, we cannot and will not force them, but we should create conditions for them to increase their advance portfolios.

Igor Shuvalov: We have looked through the loan requests the banks have received. Bank customers are asking for new loans worth over 700 billion roubles. At this point, 200 billion roubles must be guaranteed by the state, the banks believe.

Bank clients have also asked us to refinance their loan liabilities totalling 415 billion roubles. This concerns only five banks with state ownership. But in response to your directive, we will now include other banks which finance large companies among backbone enterprises. We will do this.

But I must tell you that at the moment the banks are asking for guarantees of up to 215 billion roubles out of the amount stipulated by the federal budget - 300 billion roubles. That is to say, we have some margin for the near term. If we look at the system of assets and risks the banks are currently encountering, then the lending proportions could be as follows: 250 billion roubles from Sberbank of Russia, 100 billion roubles from VTB, 60 billion roubles from Vneshtorgbank, and 50 billion roubles from Rosselkhozbank and Gazprombank.

We examined the advance portfolios of each of these banks and the loan status of their customers. The banks reported to the Government that in July they could grant additional loans totalling 164 billion roubles. This is new lending ...

Vladimir Putin: This is even more than I said.

Igor Shuvalov: Yes, this is slightly more, and this is the result of the work the banks have done by now. We have redoubled our efforts with the banks. To ensure that loans are issued more quickly, we, together with the Ministry of Finance, branch ministries and Vnesheconombank, which is the agent for providing state guarantees, have improved on the procedure and will try, within 20 days, to complete the formalities for guarantees on which decisions have been taken.

At this point, we have simplified the procedure for issuing guarantees via commissions which sit correspondingly in the Finance Ministry - with respect to defence sector enterprises; and in the Ministry of Economic Development - with respect to other backbone enterprises from our list. Decisions on these guarantees have already been made.

Particularly complex questions and questions dealing with large guarantees are examined in the Government Commission on Sustained Development of the Russian Economy.

We have also reviewed the granting of guarantees totalling 20 billion roubles for the GAZ Group. We reviewed the difficulties currently facing the company. We invited its management and majority shareholders, and they attended the examination. We studied the proposals made by lenders to regulate the existing debt. We looked at their business plan - how the manufacturer can get out of the situation in which it has found itself. At the same time, we considered an employment programme which the region, the company, and the Ministry of Healthcare and Social Development could jointly undertake to assist those subject to possible layoff.

After all these issues were examined, we decided to grant the guarantees totaling 20 billion roubles. And we will do our best to finalise these guarantees by August 1.

If you are agreeable, we will start the implementation of the project immediately.

Vladimir Putin: Do it as soon as possible.

Igor Shuvalov: We'll do it.