Vladimir Putin urges banks, at least those that enjoyed state help, to cut rates as low as 14%.

“Banks that increased their capital with subordinated loans provided from the national welfare fund should give credits to real economy at the Central Bank’s rate plus 3%. That adds up to the annual 14 %. I’m sure this level is acceptable in the current conditions.”

The government is concerned that the real economy is still struggling to get credits despite the estimated $10 billion that has been allocated to banks to lend to companies. But falling asset prices make lending risky, forcing Russian banks to charge interest rates from 17 to 20 %.

Some bankers, including Head of MDM Bank, Oleg Vyugin, say that they have no other choice but to offer cheaper credits if they want to win competition.

“Banks that have a lot of liquidity will cut their rates. The reason is very simple. There is a serious fight for clients now. Those who can pay their loans are precious clients for banks now.”

But banks hope for encouragement and urge the Central bank to cut its refinancing rate even further.