Wealth divide increases and prevents banking sector development–ARB President Garegin Tosunyan

Considerable stratification of the population on incomes – is one of primary factors constraining development of the Russian banking sector, the president of the Association of Russian Banks (ARB) Garegin Tosunyan considers.

“Many of our fellow citizens just do not have need in banking services not owing to low financial literacy or inability to active financial activity, but owing to the fact that banking services are quite complicated and expensive. On the other hand, we have serious problems, and one of them is strengthening of incomes polarisation,” Garegin Tosunyan said at the research and practice conference «Banks. Processes. Standards. Quality» which takes place in Ufa, on March 21-22.

According to ARB head, the Lorentz curve is deflecting more and more every year. If 15 years ago 60 percent of incomes were accounted for 80 percent of Russian population, now it is only 45 percent.

“Rich people became even richer, and poor people grew poorer. This stratification shifts us towards the Latin American countries, towards Brazil which is in the lead on this indicator,” Garegin Tosunyan said. “And we move away from those countries on which quality of life we would like to have.”

Thus as a whole conditions for development of the banking services market are favourable in Russia, the President ARB considers, in particular, «the market capacity is huge, and the population is quite young and adoptive to banking services».