MOSCOW Two years after Vladimir Putin's assumption of power, Russian banks still do not inspire confidence: entrepreneurs continue to send their money abroad and people put more cash under the mattress than in bank accounts.

The massive overhaul of the banking sector promised by Moscow to the International Monetary Fund (IMF) after the 1998 financial crisis is in limbo, with the government, Central Bank and banking lobby unable to reach agreement, AFP reported.

Capital flight has not let up: in 2001, $26 billion left the country, the same figure as the previous year, according to estimates by Alfa Bank, the largest private bank in Russia.

In total, some $200 billion of Russian capital are held in offshore accounts.

As for Russians' cash savings, they amount to over $30 billion, more than the entire amount of funds deposited by private individuals in Russian banks, in both rubles and foreign currencies.

Private bank deposits are sharply higher, up almost 50 percent over last year, but they have reached only $22 billion, according to Central Bank data.

Some people fear a new banking crash.

"I lost $13,000 in 1998 when the Stolichny Bank suddenly shut its doors. I don't want to risk my savings anymore and I keep them at home, in dollars," said accountant Olga Sovylova.

And there are those like Igor, who get income independent of their officially declared salaries and do not want the tax police to start snooping into their affairs.

"I have an apartment which brings in $800 a month. By putting the rent in the bank, I would run the risk of inspections," said the 35-year-old man, who did not want his last name used.

To the great loss of private banks, the Sberbank, a subsidiary of the Central Bank, stands head and shoulders above the rest of the crowd: it holds a staggering 75 percent of all private deposits.

Starved of long-term finances, most other financial establishments, often under-capitalized, cannot play a full economic role and only lend sparingly.

The total of loans granted to individuals and companies "accounts for just 12 percent of GDP in Russia, compared with figures two to five times higher in other emerging markets," said Kim Iskyan, an analyst from Investment Bank Renaissance Capital.

In Poland, Hungary and India, loans equal 25 percent of gross domestic product (GDP), 35 percent in Brazil, 57 percent in the Zzech Republic, while in the United States the figure is 145 percent.

To invest or make major purchases in Russia, you need profits or to have friends with deep pockets to lend you money. Only major exporters escape this problem, repatriating their foreign currency earnings from abroad as needed.

The banking reforms promised three-and-a-half years ago threaten the interests of a number of groups more or less directly linked to the Central Bank or the government, according to Iskyan.

"A real restructuring of the banking system would involve alienating large swathes of the structures of government.