Dear Ladies and Gentlemen!

The State Corporation "Deposit Insurance Agency" would like to bring this first-ever report – reflecting the development of the deposit insurance system in 2004 – to the attention of the public, the banking community and our partners. This document is, in a manner of speaking, the earliest chronicle of the deposit insurance system, itself a historic first in Russia.

Having absorbed the lessons of several bank crises and after lengthy discussion, in December 2003 Russian lawmakers passed a law designed to protect millions of depositors from the potential loss of their savings, to bolster the foundations of Russian banks, and to improve the public reputation of the Russian banking system in general.

Over the course of the year covered in this report, a tremendous amount of work has been done. We have poured the organizational and financial foundations for the deposit insurance system, created and launched the Deposit Insurance Agency (DIA), and begun accepting banks into the system. What’s more, in order to develop a holistic system for the defense of creditors’ rights – including those creditors not covered by deposit insurance – the government has also delegated to the DIA the right and responsibility to act as bankruptcy trustee for insolvent retail banks.

This annual report includes detailed information on various aspects of the DIA’s activities in 2004. Guided by the principles of transparency and open access to information, we intend now and in the future to present to the public as much information as possible about our activities.

Looking back on 2004, we would like to express our sincere gratitude to all those who contributed to the creation of the nationwide mandatory deposit insurance system. I am certain that our collective efforts will bear fruit both for depositors and for the national economy as a whole.