Russian Banks Gear Up for Railways Debt Restructuring

Russian banks are prepared to restructure Russian Railways' massive debt, contingent on the central bank maintaining current reserve requirements. Discussions involving government officials, VTB Bank, and the central bank are ongoing as they seek solutions for the debt problem faced by Russia’s largest commercial employer.

Russian banks are poised to ease some of the financial burdens faced by Russian Railways, agreeing to restructure its considerable debt if the central bank refrains from raising reserve requirements. This development was disclosed by VTB CEO Andrei Kostin in a recent Reuters interview.

As the largest commercial employer in Russia, Russian Railways has accrued a daunting debt of 4 trillion roubles ($50.8 billion). In response, Russia's government is actively exploring potential measures to support the national rail service. Reuters highlighted this situation in a report on November 25.

VTB, recognizing its role as the primary creditor, is deeply involved in the resolution process, with senior management participating in weekly governmental discussions. The central bank is also playing a key role in these deliberations, with Kostin noting the conditional readiness of banks to restructure the debt and delay repayments under current reserve requirements.

(With inputs from agencies.)