Pumping money via state banks to be stopped?

State banks have reportedly stopped to finance government programmes.

This statement was made by member of the “council of the republic” Hanna Shareika. She said Belarusian state banks stopped giving loans to finance government programmes and increased margin  in relation to the refinancing rate (30%) up to 12-15 percentage points, Interfax news agency reports.

Hanna Shareika addressed this question to Belarusian minister of finance Andrei Kharkavets during a discussion of the draft law on state budget for 2013 in the “council of the republic”.

“Banks stopped giving loans and raised margin against the refinancing rate up to 12-15 percentage points. In particular, we see this situation with loans in Belarusian rubles in the poultry development programme,” Shareika said.

She states it was observed in many banks forin the last two days. “Neither Belagroprombank, nor Belarusnbank and Belinvestbank give loans,” she says.

According to her, “even the most successful company cannot take credits with such interest rates. Or do we need to stop developing?”

Minister of finance Kharkavets replied: “The government will not give a single ruble more to support  liquidity of banks.” Kharkavets admitted that “current interest rates are not a resource for investment activity.”

The minister is convinced giving state-run banks additional money from state budget may have “far more difficult consequences than refusal to give loans to one, two or even ten companies in a particular period of time.”

The minister reminded about Belarus's obligations in the EurAsEC Antocrisis Fund, under which the volume of loans issued to state banks must not be excess 7 trillion Belarusian rubles.

“We have been fulfilling our obligations for the nine months. According to the schedule, 6.7 trillion rubles were placed,” he said.

It should be reminded that IMF representatives and other loan supplies of the Belarusian authorities urged to stop uncontrolled pumping economy with money via state banks by financing government programmes. The Bank of Development of the Republic of Belarus JSK was created in June 2011 on a decision of Alyaksandr Lukashenka with an alleged aim “to centralize and increase transparency of government programmes financing”. The head of state appointed former deputy prime minister Syarhei Rumas as head of the company.