The Russian government addressed prospects of development of the state banks Vnesheconombank and Vneshtorgbank at its regular meeting Thursday. In his opening statement, Prime Minister Mikhail Kasyanov stressed that one of the main aspects of the banking reform is the creation of competition in the banking sector. Speaking about Vnesheconombank, the head of the cabinet reminded the audience that the bank is practically performing some of the functions of a state debt agency, but also operates as a regular commercial bank. In the prime minister's opinion, it is time to separate the bank's functions as a debt agency from those of a commercial bank. As far as Vneshtorgbank was concerned, Mr. Kasyanov said that the program of actions by the government and the Russian Central Bank defined that there was a need for the Central Bank to withdraw from the capital of Vneshtorgbank by the end of 2002. Mr. Kasyanov mentioned that Vneshtorgbank ranks 222nd among the world banks in terms of equity capital and 25th in terms of profitability. "It is the best bank in Central and Eastern Europe," the prime minister believes. At present, various ideas circulate as to the prospects for the bank's development. Among them are privatization and transfer of the capital to the government. The prime minister called on the cabinet members to calculate all the possible consequences of the steps concerning the bank. He also emphasized that the reform of the state banks would become a major part of the first phase of the Russian banking reform.