Russian Banks Poised to Restructure Railways Debt: A Financial Balancing Act

Russian banks, led by VTB, are open to restructuring Russian Railways' substantial debt, as long as the central bank maintains reserve requirements. The government is exploring various strategies to support Russian Railways, with key meetings involving bank and central bank officials to discuss viable solutions.

In a recent development, Russian banks have expressed readiness to restructure the debt of Russian Railways, contingent upon the central bank's decision not to increase reserve requirements. This was revealed by VTB CEO Andrei Kostin in an interview with Reuters.

The government, actively seeking solutions to bolster Russian Railways—Russia's largest commercial employer—continues to deliberate over its mounting 4 trillion rouble ($50.8 billion) debt. Meetings at the government level include officials from banks like VTB and representatives from the central bank, aiming to devise effective strategies.

While banks propose deferring payments, hopes are pinned on the central bank to extend measures that allow loan restructuring without raising reserves. A suggestion to convert part of the debt into shares met rejection from creditors due to regulatory and capital concerns, as noted by Kostin.

(With inputs from agencies.)