MOSCOW, May 22 (RIA Novosti) - Russian banks could see around 20% of their debt portfolios running overdue by the end of the year, forcing them to reduce their capital, the head of the Deposit Insurance Agency said on Friday.

"Our forecast is 20%. This is serious," Alexander Turbanov told Ekho Moskvy radio. He said that other forecasts put the figure at between 15% and 60%.

"This will mean that the banking system is eating into its capital. However, although this is significant, I would not want to exaggerate the case... The most important thing is not late payment, but the loss of credit portfolios," he said.

Russian banks' assets began shrinking in February after three years of solid growth, while the share of bad loans in credit portfolios surged, reaching 2.8 percent in April.

The country's largest private Bank, Alfa Bank, warned in March that hundreds of small banks could go bankrupt by the end of the year.

Economics Minister Elvira Nabiullina said earlier this week that Russia's economy could shrink by 8% this year, less than was feared at the start of the economic crisis.