MOSCOW, Nov 10 (Reuters) - Russia's federal deposit insurance agency has approved bailouts for two regional banks and is reviewing the need of 10 others for similar assistance, the head of the agency Alexander Turbanov said on Monday.
He said the central bank is providing the agency with loans for the bailouts at 5.5 percent interest. It will then lend this money at 6.5 percent to parties willing to invest in the struggling banks.
"In the case of two banks the rehabilitation plan has been approved... The financial condition of another ten are being reviewed at the suggestion of the central bank so that we can determine how to proceed," Alexander Turbanov said, declining to name them.
"We think it is fair to set the interest rates lower than the market is offering, because the investors are taking on very big risks," Turbanov said.
He added that his agency and the central bank are focusing on Russia's 200 largest banks, but are also taking into account the social and economic importance of the banks eligible for assistance.
Important factors are the volume of deposits they hold for private individuals and the size of their portfolio of loans to sectors of the real economy, he said.

(Reporting by Dmitry Sergeev, writing by Simon Shuster; Editing by Hans Peters)

((simon.shuster@reuters.com; +7 495 775 1242))

Keywords: RUSSIA BANK/BAILOUTS

(Wraps Putin comments, bailout loans disbursed, c. bank comments)
MOSCOW, Nov 10 (Reuters) - Russia turned its anti-crisis effort toward smaller lenders and sectors of the real economy under a $200 billion state aid package on Monday as Prime Minister Vladimir Putin warned against abuse of state bailout money.
Money movements out of the country would be strictly monitored to ensure state aid is not spirited abroad, Putin told a meeting of his government, hours before the central bank said October net private capital outflows reached $50 billion.
"These (funds) must work inside Russia and according to their designated purpose. We must rule out any kind of corporate egoism here, any kind of corruption or abuse," Putin told a government meeting shown on Vesti television.
He pointed out a growing trend toward money transfers out of the country from banks receiving state aid, and called not only on financial regulators but criminal investigators to deal with the problem.
Analysts and market sources have said state money deployed to battle the financial crisis, especially on the currency market, has been hastily converted into foreign currencies, driving capital flight into the tens of billions of dollars in recent months.
The government rescue efforts and a positive global backdrop helped keep markets out of the red on Monday, with the MICEX index up 2.2 percent at the close of trading, and the less liquid RTS up 6.8 percent.
Figures from the economy ministry, reported by Interfax, showed that price growth is still accelerating with inflation set to reach 0.8-1.0 percent in November and 12.5-12.7 for the first nine months of 2008, compared to 10.6 percent in the same period of last year.
The chairman of the central bank, Sergei Ignatyev, meanwhile warned of more flexibility in the rouble rate.
"I do not rule out more flexibility in the rouble exchange rate with some tendency towards weakening of the rouble in the current conditions," he said.
The rouble traded at the weaker end of the trading band close to the level of 30.41 roubles to the basket seen by the market as the central bank support level. The market was closed when Ignatyev made his remarks after sluggish trade earlier.

State-controlled VTB, Russia's second largest bank, said it loaned out 28 billion roubles ($1.04 billion) in the first week of November to sectors such as machine building and agriculture, following up 229 billion roubles in loans last month.
Small regional lenders are also set to get a hand from the state through the federal deposit insurance agency, which will give loans at 6.5 percent to investors willing to pump the loans into certain struggling banks.
Two banks have already been cleared to receive support in this way, based not only on their size but their social and economic significance in their region. Another ten are being reviewed for it, and the list could grow to between 20 and 40 banks, the head of the deposit insurance agency said.
The move follows an earlier phase of the rescue package that seemed to target Russia's wealthiest businessmen, who received $8 billion from Russia's foreign exchange reserves to refinance foreign debts.
In total, the state-owned Development Bank, known as VEB, has been entrusted by the Kremlin to distribute a $50 billion rescue package, helping Russian companies to refinance a total of $120 billion of Western loans by the end of 2009.
(Reporting by Dmitry Sergeev, Gleb Bryanski and Simon Shuster; Editing by Toby Chopra) ($1=26.96 Rouble) Keywords: FINANCIAL RUSSIA/

(simon.shuster@reuters.com; +7 495 775 1242)

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