After months of arguing, the Central Bank has gotten its way with banking reform.

The government on Wednesday adopted a reform plan that was essentially no different that one proposed by the bank -- despite months of debate with the finance and economic ministries.

The Central Bank has made an important concession to its opponents: stricter requirements for banks' capital. However, this change is largely symbolic as it doesn't take effect for years, analysts said.

The plan obliges the Central Bank to close down banks with capital adequacy of under 10 percent. Currently, the capital adequacy requirement is 2 percent. Capital adequacy is a ratio between capital and assets with regard to risks.

Under the agreement, however, the measure will only be enforced after 2005, and only for banks with capital under 5 million euros ($4.43 million). Starting in 2007, the rule will apply to all Russian banks.

The Central Bank succeeded in "adopting a gradual approach to the banking reform without detailing measures and setting very distant deadlines for implementation of those measures," said Alexei Zabotkin of United Financial Group.

Even though 10 percent capital adequacy is normal for emerging markets, closing down a bank immediately after it falls below that mark is a mistake, analysts said.

The "automatic trigger" plank, which warrants automatic license revocation, should be set at about 5 percent," said Mikhail Matovnikov, deputy head of Interfax Rating Agency. "[Banks] should have a certain margin in a situation when it has problems but is still viable," he said.

Another provision of the plan will require banks to adopt international accounting standards by 2004.

Some analysts fear smaller banks may have a hard time adopting IAS.

Matovnikov, however, said that a bank's capital does not vary significantly whether estimated according to Russian or international accounting standards. "The Central Bank capital calculation methodology is stringent enough," he said.

"Fourteen out of 30 banks surveyed by Interfax had larger capital as estimated under international standards rather than Russian ones."

With or without reform, foreign investors are no more willing to deal with Russian banks than they were in August 1998.

"There is still little interest to the Russian banks from foreign investors," Christof Ruehl, the World Bank's chief economist for Russia, told a banking conference in London on Wednesday. "They want more information, and banking is not the key sector, they would like to invest."

Most of the conference's participants were equally skeptical.

"General attitude is fairly downbeat, they don't trust it [banking sector], they just wait for the problems to rise again, citing weak regulation and weak incentive for reform," said Kim Iskyan, an analyst at Renaissance Capital.