MOSCOW. Feb 7 (Interfax) - The head of Russian bank Sberbank (RTS: SBER) German Gref predicted on Thursday that the majority of Russian banks would start feeling the effects of the current global financial crisis in the second quarter of 2008 and would respond by "somewhat" raising interest rates.

As a result, "money supply for the real sector will shrink," the volume of investment will diminish and economic growth will slow down, Gref, who is a former economic development and trade minister, forecast in talking to reporters after a conference between the prime minister and the top brass of the Russian Banks Association.

That the global crisis will hit Russia "is obvious already, the question is by how much the pace of lending and money supply will decrease," the Sberbank chief said.

In 2007, the Russian banking sector's credit portfolio increased 52%, but in 2008 it would not grow by more than 40%, he said.

"There's nothing critical about that, but we need the same pace of increase, and that won't happen," Gref said.

Investment will not grow by more than 20% for 2008, he said.

What will happen in 2009 depends on how much the global crisis affects the Russian financial markets, Gref said.

As regards short-term liquidity, the ex-minister said first of all measures should be taken to deal with the effects of possible cash gaps. "Complete mutual understanding has been achieved there. I hope no problems will arise," he said.

Such measures are the Central Bank's job, and the prime minister will order doing all the work in the current quarter, Gref said.

Whether long-term liquidity will be sustained depends on the needs of the real sector and "is a matter of legislation," he said.

Gref also said that the Finance Ministry had been ordered to consult banks on whether the resources of development institutions and the National Welfare Fund could be used to sustain the liquidity of the banking system.

"Today the situation in the world financial system is very tense, and the Russian Banks Association has asked the prime minister to hold a conference on how the situation in world finances may affect the situation in Russia," Gref said.

So far there are no indications that the global crisis has affected Russia, because there exists a stability reserve that enables Russian banks to function confidently and build up assets, Gref argued.

"But with a time lag, the crisis will impact the situation. We are grateful that the prime minister has got us together and discussed the situation in advance, before liquidity problems have arisen," Gref said.