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Russian central bank's sale of Otkritie to VTB to go through this year -Finance Minister

FILE PHOTO: A Russian state flag flies over the Central Bank headquarters in Moscow

MOSCOW (Reuters) - The Russian central bank's deal to sell bailed-out lender Otkritie to state bank VTB should be finalised by the end of the year, Deputy Finance Minister Alexei Moiseev told reporters on Tuesday.

Russian lawmakers have been considering draft legislation that would give the banks and the regulator until the end of 2023 to complete the deal without needing to hold a competitive tender or seek approval from Russia's competition authorities.

Asked if the sale would now be postponed until next year, Moiseev said he expected the deal to close in December and said: "the necessary processes are underway".

The central bank, VTB and Otkritie did not immediately respond to requests for comment.

Russia's parliament set a year-end deadline for the deal when it approved legislation in March to help it pass with minimum bureaucracy.

Both VTB and Otkritie have been targeted with Western sanctions over Russia's actions in Ukraine.

The central bank bailed out Otkritie, once Russia's largest private lender, in 2017 as part of a years-long campaign to clean up Russia's banking sector.

For foreign banks looking to offload assets, the process is more complicated.

"A deal can only be approved by government commission, only if there is direct interest from Russian beneficiaries," Moiseev said.

An Aug. 5 decree, signed by President Vladimir Putin, banned investors from so-called unfriendly countries from selling shares in key energy projects and banks until the end of the year, unless given special approval.

Putin last month gave approval for Russian carmaker Avtovaz to buy RN Bank, a joint venture between Italian lender UniCredit and the Renault-Nissan-Mitsubishi Alliance, a rare sale of a foreign-owned strategic asset.

(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Mark Trevelyan)