BOSTON — THE Central Bank of the Russian Federation is opening the way for two United States banks to provide commercial banking services in Russia.
On Oct. 28, Citibank was given approval to upgrade its representative office in Moscow to a commercial banking facility. Chase Manhattan Bank has applied for a full banking license.
``The government appears determined to follow the path of privatization and also to encourage foreign investment,'' says William Rhodes, a vice president in Citibank's New York headquarters.
``Citibank can play a constructive role in the creation of a modern banking system, particularly through the introduction of advanced technology and international banking skills,'' he adds.
Citibank, the largest banking company in the US, plans to move and expand its office early next year, says spokesman Kenneth Campbell. Citibank's small office in Moscow, which opened in October 1992, has provided only advisory services until now.
The new subsidiary will offer commercial services, such as taking deposits, making loans, and exchanging currency, to both Russian and foreign clients.
Citibank is also planning to open a St. Petersburg branch next year, although an application has not yet been submitted, Mr. Campbell says.
The expansion to commercial banking is significant because ``US companies will be able to operate like anywhere else in the world,'' says Daven Oswald, a contractor for the US-Russia Business Council in Washington.
Banking has become easier during the last year as Russian banks improve service and US banks move to expand, Mr. Oswald says.
The US banks will improve the business climate ``not only for American companies, but also for joint ventures,'' he adds.
Chase Manhattan Bank says it expects notification of approval for a full banking license within the week.
Chase has had offices in Russia for 20 years but only applied for a license a few months ago. The approval process was slowed by political turmoil this summer, says company spokesman John Anderson.