Latvian banks to continue operations in Russia

RIGA - Russia's central bank is preparing a document that will ease requirements on CIS and Baltic bank operations within Russia by no longer considering banks from those countries as "offshore."

The Riga-based business daily Bizness & Baltija reported that an informed central bank source said that the Bank of Russia's order could go into effect by the end of the month.

"This order directly affects Latvia, proclaimed an offshore zone by the Bank of Russia until now. If a country is supposedly an offshore (entity), it is difficult to open an account in Russia, which has already lead Latvian bankers to work with its eastern neighbor via third countries," the paper wrote.

Bizness & Baltija's source claimed that the move is linked to the fact that Russia's central bank president, Viktor Gerashchenko, has not responded to a letter from Bank of Latvia President Einars Repse demanding an explanation of the Bank of Russia's recent policies, which he said appeared to be economic sanctions.

In March the Russian central bank ordered the re-registering of non-resident bank accounts in Russian banks.

Meanwhile, for a bank from any Bank-of-Russia-declared offshore zones to hold an account in any Russian bank as of June 7, it must meet one of two requirements: hold equities of over 100 million euros ($88.49 million), or have an international rating of AAA. No Latvian banks fit the criteria.