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Russian Banks Strive to Enter Computer Age

AN antiquated banking system is about to receive a makeover here, as Russia strives to enter the financial modern age.

Currently, computers are something most bankers in Russia can only dream about, meaning accounting and cash transfers consume vast amounts of time.

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The outdated methods are aggravating Russia's economic crisis by stimulating hyperinflationary trends. That is because businesses, squeezed by slow cash flow, must rely on government credits to stay afloat.

A Russian Central Bank pilot program to computerize debt settlement procedures aims to speed up the process, thus easing pressure on the struggling local business sector.

"Most trade in Russia is now done on a cash-in-advance basis," says Yuri Markov, deputy chief of the Russian Central Bank's Kaliningrad branch. "This is a big problem both for the buyers and the sellers, who can't supply goods until they receive the money. By introducing electronic payments we will allow industry to function more efficiently."

Kaliningrad, St. Petersburg, and Pskov are three Russian regions selected by the Central Bank for the computerization experiment.

Under the program, to be finalized in late May, a German-based firm, Siemens-Nixdorf Osteuropa GmbH, will supply about $3-million worth of equipment, software, and training at the Kaliningrad Central Bank branch, Mr. Markov says.

Siemens-Nixdorf officials in Moscow declined to be interviewed.

While Siemens-Nixdorf collaborates with Kaliningrad, United States-based Unisys Corporation is to work with St. Petersburg officials on a computerized system there, and the German NCR Corporation will build a network in Pskov.

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"It's not accidental that the Central Bank has chosen these three areas for computerization," says Nina Sedykh, another deputy chief of the Kaliningrad bank branch. She adds that all three areas have close contact with the West, and are more open to new ideas.

In Kaliningrad's case, the infrastructure already is in place, including a well-developed telephone system by Russian standards, Markov says. He adds that computerization will pave the way for the eventual introduction of bank credit cards.

After a trial period, Central Bank officials in Moscow will study the three computer operations with the goal of working out a cash settlement system for all of Russia.

Deeply entrenched conservatism in the heartland, however, will make introducing new methods and technology in some regions a challenge, Markov says.

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