|                                                                                                                                                             |  | PRIMORSKIY BANKING MORE COMPETITIVE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | September 1997by John CrossonLocating dependable banking services in Primorskiy krai is a major concern for U.S. companies
doing business there.    Of the 20 regional banks in Primorskiy krai, the president of the Central
Bank of Russia has said that only 14 percent are financially reliable, compared with 38 percent in
Russia generally.  Increasing competition should improve banking services for U.S. companies in
the krai, however, and ultimately throughout the Russian Far East (RFE).Local Banks
Two local banks dominate the market: Dalnevostochniy Bank and Dalrybbank.  Both appear
on the "Interfax-100" list of Russia's biggest commercial banks--the only RFE banks listed.  Both
banks also participate in the "Financial Institutions Development Project" operated jointly by the
World Bank and the European Bank for Reconstruction and Development.Dalnevostochniy Bank is paired with Bank of America, while Dalrybbank signed a twinning
agreement with ING Bank in June 1997.  Richard Wortley, Project Director for Bank of
America's program with Dalnevostochniy Bank, comments that the Russian bank has already
introduced new practices in strategic and financial planning, human resources, and banking
standards.  A focus on the customer is also emphasized.  "Meeting customers' needs as a way to
ensure the bank's success has become a major focus," says Wortley.Outside Banks Moving In
Many Moscow banks have entered the local market, as well.  Inkombank, Vneshtorgbank,
Tokobank, Mosbiznesbank, and Bank-Capital all have offices in Vladivostok.  Primoriye
Bank, founded by the krai government to manage its budget, was purchased recently by
Oneksimbank.  Such banks are frequently better able to provide financing in the krai due to their
easier access to foreign and domestic capital.  Inkombank, for example, was the first bank in the
region to offer loans under the U.S. Department of Agriculture GSM-102 commodity credit
program.  The Moscow banks, Wortley says, are also introducing "a much greater awareness of
competitive forces."ING Bank--Dalrybbank's twinning partner--was the first foreign bank to open a representative
office in the RFE.  ING has developed financing programs for export-oriented companies.  In
February 1996, ING extended a $10 million full-recourse barter facility to Dalmoreproduct, the
RFE's largest fishing company.Local Services
Primorskiy banks offer the same services as banks licensed to do business anywhere else in the
Russian Federation.  Resident foreign companies can use their Russian bank to purchase rubles for
business purposes, open and maintain ruble and foreign currency accounts, and invest in Russian
enterprises with rubles.  Just as elsewhere in Russia, most RFE banks will process wire transfers
only for their clients, and often will execute transfers only for commercial clients.  Most banks
complete wire transfers within 48 hours (see BISNIS Bulletin, December 1996, Page 1).Credit cards and travelers checks are becoming more widely-recognized in the RFE. 
Dalnevostochniy Bank, Dalrybbank, and Inkombank issue Visa cards.  Cash advances are
available on Visa, Europay/MasterCard, and Citicorp cards.  American Express travelers
checks may be cashed at Sberbank, Dalnevostochniy Bank, and Primorskiy Social Bank.Remember
When seeking banking services in the RFE "don't take anything for granted," advises Ben
Berrera, Vice President of Corporate Relations for the National Bank of Alaska.  Utilize a variety
of sources, such as U.S. banks to identify correspondent banking relationships, or the American
Business Center in Vladivostok to research local banks.  Plan bank visits carefully, and meet with
the bank's chairman and the head of its international department.  As elsewhere in Russia, good
personal relationships are crucial and can open many doors.  For more information on banking in
the RFE, visit BISNIS Online at www.mac.doc.gov.bisnis/cables/970403ru.htm.John Crosson covers finance for BISNIS.  The U.S. Commercial Service in Vladivostok
contributed to this article.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)