This paper offers an analysis of profit strategies pursued by Russian banks depending on their ownership type, including federal state banks, banks of mixed ownership, banks connected to enterprises producing for the final consumers, and regional pocket banks owned by one particular business group or enterprise. The paper outlines a set of factors that capture a range of potential hindrances on the way to banks’ involvement in Russian economy. It traces how the characteristics of the state regulation and peculiarities of the economic sectors affect the proliferation of certain type of banks—pocket banks—at the expense of others. It looks into how the various types of banks function under the given set of political and economic constraints, and how these constraints shape the banking system in Russia and its relationships with the enterprises and sectors.

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