MOSCOW, October 28 (RAPSI) – Russia’s Finance Ministry has developed a bill on creation of Fund for consolidation of bank sector and managing company, which may be used by the Central Bank to invest into banks under financial rehabilitation, RIA Novosti reported on Friday.

In July the Central Bank proposed a procedure to financially rehabilitate problematic banks through creation of special fund which will be a part of credit organizations under rehabilitation.

Currently another procedure is being used: the Central Bank provides credits for problematic banks through the Deposit Insurance Agency. Effectiveness of this procedure was criticized by the Central Bank in recent months.

Bill is expected to come into force in March 2017.

The Finance Ministry argued that this innovation is required due to dwindling amounts of money provided by the Central Bank for financial rehabilitation of banks. According to the ministry, as of September 1 of this year, the Deposit Insurance Agency took part in prevention of bankruptcy for fifty banks and transfer of funds and obligations of six problematic banks to more stable organizations.