MOSCOW -- Russia plans to raise the minimum shareholder equity for its banks to 1 billion roubles ($35 million) over six years, potentially wiping out half of the sector, Financial Minister Alexei Kudrin said on Wednesday.

Russia's banking system is made of 1,100-plus banks, the 50 largest banks accounting for 80 percent of total assets.

The government and the central bank have repeatedly welcomed consolidation of the sector.

"I am ready, exactly a year from now, to propose a bill that increases the banks' minimal capital to 1 billion roubles and to give the banks five years to reach that level," Kudrin told a financial forum.

Kudrin estimated some 500 banks could comply with the demand, but did not specify what exactly the "capital" is.

Russia has already set a minimum size for bank's shareholders equity at 90 million roubles effective from Jan.1 and 180 million from 2012. Kudrin's proposal implied a 10-fold increase to those requirements within six years.