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The upper house of Russia's parliament approved on Monday
The upper house of Russia's parliament approved on Monday a law on extra measures to support the country's financial system, allowing the issue of subordinated loans to the largest banks and lending to rated Russian banks.

The state-owned VEB bank will be allowed to issue the country's largest lending establishments foreign currency loans of up to $50 billion until December 31, 2009 to repay foreign loans taken before September 25, 2008.

Russia's largest state-owned bank Sberbank, VTB, and the agricultural bank Rosselkhozbank are mostly concerned.

Under amendments to the law on Russia' Central Bank, rated Russian banks will be able to obtain unsecured loans for up to six months.

"Today, 116 banks in Russia have the necessary rating for obtaining an unsecured loan for up to six months from the Bank of Russia," said Dmitry Ananyev, head of the Federation Council's committee for financial markets and monetary circulation.

The lower house of parliament passed the bills last week.

Russian Finance Minister Alexei Kudrin said the decision to lend additional subordinated loans to banks may soon be reviewed.

"This measure has been taken. I am not ruling out that we will have to reconsider the issue," he told a meeting of the inner cabinet.

Russian Prime Minister Vladimir Putin said on Friday the government was drafting a bill to provide subordinated loans of up to 950 billion rubles ($36 billion) to banks for 10 years.

The premier also urged the introduction "as soon as possible" of earlier approved measures to deal with the global financial crisis.

Speaking to the inner cabinet, Putin said Russia was able to cope with the financial crisis, but that, "We must speed up the implementation of the decisions we have made."


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