Justification for Rosselkhoz

Deputy Prime Minister Alexei Gordeev yesterday stood up for Rosselkhozbank (RSHB), whose activities recently raised questions from the Accounts Chamber. The management of the Russian Agricultural Bank operates within the framework of a business plan approved by the bank’s supervisory board, that is, members of the government, the minister said. And the management deficiencies identified by auditors are “technical and can be found during an audit of any organization.” A source from the Vremya Novostey newspaper in the Accounts Chamber agreed in response that the results of the RSHB audit were not fundamentally different from others, but at the same time once again called on the government bank to “spend budget funds more economically.”

The conclusion of the Accounts Chamber, which audited the activities of Rosselkhozbank for 2000-2002, published at the end of November, attracted attention already because shortly before this, the Russian Agricultural Bank filed an application for a license to work with individuals and began to prepare for the development of the retail market. The press release of the joint venture stated: “The tasks set during the creation of the Russian Agricultural Bank were not fully implemented. Thus, almost 30% of allocated loans go to organizations not related to agriculture. The reason for this, the auditors said, was the failure to comply with the “presidential order on the legislative determination of the status of the Russian Agricultural Bank.” In addition, they drew attention to the dividends paid by Rosselkhoz to the budget (at the end of 2001, they “amounted to only 1.9 million rubles”) and the high costs of the branch network.

Yesterday, Agriculture Minister Gordeev, who heads the supervisory board of the Russian Agricultural Bank, made it clear that “the inspection reports were interpreted incorrectly” as an indication of the ineffectiveness of his management. “The Accounts Chamber identified two shortcomings directly related to the management of the bank - minor violations of the Central Bank’s provisions on internal control and several loans issued without the approval of the supervisory board,” Andrey Cherepanov, press secretary of the Russian Agricultural Bank, explained to the Vremya Novostei newspaper. The registration of these loans for a number of agricultural enterprises in the Russian Agricultural Bank is explained by the fact that in 2000-2001 “the bank worked for some time without a supervisory board” - “the decision on these transactions was made by the credit committee.”

Otherwise, as Alexey Gordeev noted, Rosselkhozbank acts exclusively according to the business plan and in accordance with the directives of the council, which now meets at least once a month. “The technical deficiencies found during the bank inspection can be found in any other organization; it is beneficial for someone to create a stir around the bank,” the deputy prime minister believes. In conclusion, the Deputy Prime Minister called on “instead of criticizing Rosselkhozbank, to remember that it is the second largest creditor of agriculture after Sberbank.”

The Deputy Prime Minister's support for RSHB is understandable because the bank may soon have to defend its right to retail business (according to our newspaper, the Ministry of Economic Development and Trade wants to discuss the concept of its development at a government meeting on February 15). In addition, as the Vremya Novostey newspaper learned, the Russian Agricultural Bank prepared a response for the ministers on all points of the Accounts Chamber’s conclusion and, in particular, commented on its credit policy. “In 2002, with an authorized capital of 2,805 million rubles, the bank issued loans in the amount of about 10 billion rubles,” writes management. -- As of January 1, 2003, the share of agricultural enterprises in the loan portfolio is about 70%.” And the presence of borrowers not directly related to agriculture “is determined by the requirements of the Bank of Russia to minimize credit risks.”

Yuri VERETENNIKOV, Vera SITNINA