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Business news, 20.05.2004 14:58

City taps banking partners

City taps banking partners City Hall has named the banks that it will use to process up to 4.5 billion rubles ($155 million) of surplus city budget income in 2004.

Conspicuously absent from the list is Baltinvestbank, which was one of City Hall's biggest partners when former governor Vladimir Yakovlev was in charge of the city.

The banks selected included Baltiisky Bank, Industrial Construction Bank, or PSB, St. Petersburg International Bank and Bank St. Petersburg, the vice president of which is Sergei Matviyenko, son of Governor Valentina Matviyenko, who was appointed to the position a year ago. However, the absence of Baltinvestbank among the chosen few indicates that City Hall has returned to the system of selecting financial structures to service the city government that operated before 1996, when President Vladimir Putin worked in City Hall as a deputy mayor.

The practice of processing an administration's entire budget through private banks was suspended last year, after the federal government issued a regulation saying such funds should be serviced only by the Central Bank. However, the approximately 20 administrative regions that contribute more to the federal budget than they receive have retained the right to service income over and above what they planned for in their budgets in local commercial banks.

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