Expensive credits will be replaced by free loans for Russian regions

New substitution program has been worked out. 28.Aug.14 10:58 AM By Abigail Richards Photo Toinnov.com    576

Expensive credits with high interest rates fr om commercial banks for different Russian regions will be replaced by free loans. Necessary funds will be provided by the federal budget. This resolution has already been signed by Dmitry Medvedev. It includes all terms and conditions for redemption of debt. This program will primarily include those regions that were forced to borrow money for implementation of President Decrees which have been established in May. Regions were forced to take credits in order to cover their budget deficit. Credits were provided by several commercial banks. This led to situation when share of credit in the overall debt has increased enormously. Moreover servicing costs have also increased by 22%. This information was provided by “ServerInform” media agency. New program of regional support will include first 20 regions wh ere share of commercial debt is twice higher in comparison with all revenues. 60 billion rubles have been provided for implementation of this project. The interest rate of budget loans will be 0.1% per year. This is practically nothing. At the same time regions should fit several requirements in order to take part in this program. Prosperous regions such as Moscow, St. Petersburg, Tyumen region and Krasnoyarsk Territory will not be able to take part in this program along with subsidized regions which include Chechnya, Ingushetia, Kamchatka and Chukotka.

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