Banking in Russia

Banking in Russia is subject to significant regulations as banks in the Russian Federation have to meet mandatory Russian legislation requirements, and comply with numerous Bank of Russia instructions and regulations.

History

Soviet period

During the first few years following the Russian Revolution, all banks' assets were nationalized and liabilities canceled in late 1917, and banking was declared a state monopoly. During war communism from January 1920 to October 1921, there were no banks at all in operation in Russia. With the New Economic Policy, a single-tier banking system gradually took shape. Following the NEP, the Soviet system relied on several specialized financial institutions, which were reorganized in waves of reform following major leadership transitions in 1928-1932, 1955-1959, and 1987-1988:

The State Bank of the USSR (Russian: Государственный банк СССР or Gosbank), est. October 1921 as State Bank of the Russian Soviet Federative Socialist Republic, with scope expanded to the whole Soviet Union in 1923. Over time, the Gosbank also developed a network of foreign subsidiaries including Moscow Narodny Bank Limited (est. 1919 in London from an earlier affiliate of a Russian state-owned bank), BCEN-Eurobank (est. 1921 in Paris as Banque Commerciale pour l'Europe du Nord), Ost-West Handelsbank (est. 1971 in Frankfurt), Donau Bank (est. 1974 in Vienna), and East-West United Bank (est. 1974 in Luxembourg).
the State Labor Savings Banks System [ru] (Russian: Государственные трудовые сберегательные кассы СССР or Gostrudsberkassy), inherited from the savings banks of the Russian Empire and repurposed as the system's monopolistic retail financial institution; in 1963, the savings banks system was transferred under the jurisdiction of the Gosbank. It was reorganized in 1987 as the Savings Bank of the USSR [ru].
the Industrial Bank (Russian: Промышленный банк or Prombank) est. 1922, which was reorganized several times and in 1928 absorbed the former Electrobank (est. 1922); in 1959 it absorbed parts of Selkhozbank and Tsekombank to become the All-Union Bank for Financing Capital Investments (Russian: Всесоюзный банк финансирования капитальных вложений or Stroybank); reorganized in 1988 as the State Commercial Industrial and Construction Bank of the USSR [ru] (Russian: Государственный коммерческий Промышленно-строительный банк СССР or Promstroybank), with some operations spun off as Agro-Industrial Bank (Russian: Агропромышленный банк СССР or Agroprombank) and Bank of Housing, Communal Services and Social Development (Russian: Банк жилищно-коммунального хозяйства и социального развития СССР or Zhilsotsbank).
the cooperative banking system, established in 1922 as the Bank of Consumer Cooperatives (Russian: Банк потребительской кооперации or Pokobank), reorganized in 1923 as the All-Russian Cooperative Bank [ru] (Russian: Всероссийский кооперативный банк or Vsekobank), then replaced in 1936 with the All-Union Bank for Financing the Capital Construction of Trade and Cooperation (Russian: Всесоюзному банку финансирования капитального строительства торговли и кооперации or Torgbank) and eventually abolished in 1956.
the Central Bank of Public Utilities and Housing Construction [ru] (Russian: Центральный банк коммунального хозяйства и жилищного строительства or Tsekombank), est. 1925 and terminated in 1959 with its operations allocated to the Gosbank and Stroybank.
the Agricultural Bank of the USSR [ru] (Russian: Сельскохозяйственный банк СССР or Selkhozbank), established in 1932, terminated in 1959 with its operations allocated to the Gosbank and Stroybank.
the Foreign Trade Bank of the USSR (Russian: Банк для внешней торговли СССР or Vneshtorgbank (established in 1922 as Roskombank [de] and renamed in 1924). In 1988 it was reorganized as the Bank for Foreign Economic Affairs of the USSR (Russian: Банк внешнеэкономической деятельности СССР or Vnesheconombank).

Perestroika

Perestroika reforms affected the banking system. In June 1987, a plenum of the Central Committee of the CPSUs took place, where it was decided to improve the system. In July 1987, the Central Committee of the CPSU and the "Council of Ministers of the USSR made Resolution No. 821 "On improving the system of banks in the country and strengthening their impact on improving the efficiency of the economy.

The creation of banks on a commercial basis was permitted by the Law "On Cooperation in the USSR", adopted on May 26, 1988. A number of new cooperative banks licensed starting from August 1988, the first being Soyuz-Bank in Shymkent (now in Kazakhstan) followed by Patent Bank in Leningrad.

With the dissolution of the Soviet Union, the Savings Bank's Russian operations were reorganized as Sberbank in 1990-1991. The Promstroybank was abolished in August 1991, and Vnesheconombank suspended payments in December 1991. The latter was eventually reorganized in 2007 as a Russian state development bank, and eventually in 2018 as a state development corporation branded VEB.RF. Sberbank continues to this day as one of Russia's largest banks, retaining senior ex-Gosbank personnel and most of the present Russian government's banking business.

Independent Russia

The modern Russian Federation inherited the banking system of the Soviet Union, with a few big state banks (like Sberbank, Vneshekonombank, and Vneshtorgbank). After more than 15 years of reforms in Russia, there are now 1183 financial institutions with 3286 regional branches.^[2]

1998 financial crisis

In 1988, 41 commercial and cooperative banks were registered in the USSR, including 25 banks on the territory of the RSFSR. By January the 1st, 1990, the statutes of 225 commercial and cooperative banks were registered, including 184 in 1989.^[3] In 1990, in connection with the declaration of state sovereignty by the RSFSR, the Russian Republican Bank of the State Bank of the USSR and Russian banks of specialized banks were declared the property of the RSFSR. Also, the Supreme Council of the RSFSR decided to transform all institutions of state specialized banks in the autonomous republics, territories and regions into commercial banks before January 1, 1991. In this regard, the number of banks in the RSFSR increased several times in the second half of 1990. As a result, the number of banks in the Russian Federation was 1360 on January 1, 1992.^[4]

2008 financial crisis

Beginning in early October 2008, several Russian banks failed due to liquidity issues related to US credit derivatives. Russian bank Globex barred customers from withdrawing money from their accounts on October 15, 2008, in the first bank run of the current global economic crisis.

2010s

In June 2013 Elvira Nabiullina was appointed as the chairman of the Central Bank of Russia.^[5] In an interview with television channel Channel one she said Russia's Central Bank has no blacklists of banks subject to license revocation. She added that the Central Bank will not warn any bank about such measures. She said, "As a matter of fact, no one knows who might be the next, We cannot warn anyone. Moreover, it would be wrong to do that. I know not a single country worldwide where the central banks would warn about license revocation. It is not ruled out that in case a bank is warned, a mala fide owner or managers could divert assets, making settlements with the closest clients, so a rank and file depositor will finally receive much less money".^[6]

And so, in December 2013 Central Bank of Russia revoked licenses of three commercial banks, Investbank, Smolensky Bank and the Bank of Project Finance and later then Ecoprombank, Masterbank, Simbirsk and many others.^[7] State-run Agency for deposits’ insurance paid money to clients.^[8]

Credit and debit cards

At the end of 2008, there were 119 million bank cards in circulation in Russia.^[9]

Sanctions

In March 2014, amidst the 2014 Crimean crisis, following the passage of a secession referendum, the declaration of independence of the Republic of Crimea from Ukraine and the process of accession to Russia that followed it, U.S. President Barack Obama announced sanctions on Rossiya Bank. International payment systems Visa Inc. and MasterCard suddenly stopped service of credit cards issued by the Rossiya Bank. Non-cash transactions of SMP Bank (owned by Rottenberg brothers) and Sobinbank (100% subsidiary of Rossiya) were also frozen.^[10] Many Russian residents turned to national banks operations although they still have no doubt in reliability of foreign transnational financial institutions.^[11]

Banks

Largest banks in Russia in terms of net assets (millions of rubles) as of December 2020:^[12]^[13]

No.	Bank	Assets, in million rubles
1	Sberbank	32 421 026
2	VTB Bank	15 813 216
3	Gazprombank	7 613 174
4	Alfa-Bank	4 229 025
5	Rosselkhozbank	3 539 546
6	Credit Bank of Moscow	2 988 171
7	Otkritie FC Bank	2 530 760
8	Promsvyazbank	2 503 499
9	Sovcombank	1 576 708
10	Raiffeisenbank	1 432 353

References

^ "Рейтинг банков | Банки.ру". Banki.ru. Retrieved 3 January 2020.
^ "Справка о количестве действующих кредитных организаций и их филиалов по состоянию на 01.02.07 - Банк России". www.cbr.ru.
^ Геращенко В.В. (10 July 1990). "Отчет о работе государственной системы банков СССР за 1989 год" (pdf). Центральный банк Российской Федерации. Retrieved 28 August 2019.
^ "Годовой отчет Центрального банка Российской Федерации за 1992 год" (PDF). ЦБ РФ. 1993. Retrieved 5 October 2019.
^ "Central Bank Cancels 3 More Bank Licenses". Moscow Times. Retrieved 14 December 2013.
^ "Russia's Central Bank has no blacklists of banks subject to license revocation - governor". ITAR TASS. Retrieved 14 December 2013.
^ "Russia's Central Bank revokes licenses of 3 commercial banks". Itar Tass. Retrieved 14 December 2013.
^ "Agency for deposits' insurance starts paying clients of banks whose licenses were revoked". Itar Tass. Retrieved 14 December 2013.
^ "A reversal of fortunes for Russia?". Cards International. 13 April 2009. Retrieved 14 July 2022.
^ "Bank Rossiya Is First Russian Lender Under U.S. Sanctions". Bloomberg. 20 March 2014. Retrieved 21 March 2014.
^ "TRANSNATIONAL BANKS IN CENTRAL AND EASTERN EUROPE: WHERE DO RUSSIANS WANT TO INVEST THEIR MONEY?" (PDF). Retrieved 15 May 2016.
^ "Рейтинг банков России". Коммерсантъ. 2020-12-09.
^ "Russia: Top 10 largest banks, by total assets 2020". Retrieved 1 October 2020.

External links

[1] "Рейтинг банков | Банки.ру". Banki.ru. Retrieved 3 January 2020.

[2] "Справка о количестве действующих кредитных организаций и их филиалов по состоянию на 01.02.07 - Банк России". www.cbr.ru.

[3] Геращенко В.В. (10 July 1990). "Отчет о работе государственной системы банков СССР за 1989 год" (pdf). Центральный банк Российской Федерации. Retrieved 28 August 2019.

[4] "Годовой отчет Центрального банка Российской Федерации за 1992 год" (PDF). ЦБ РФ. 1993. Retrieved 5 October 2019.

[5] "Central Bank Cancels 3 More Bank Licenses". Moscow Times. Retrieved 14 December 2013.

[6] "Russia's Central Bank has no blacklists of banks subject to license revocation - governor". ITAR TASS. Retrieved 14 December 2013.

[7] "Russia's Central Bank revokes licenses of 3 commercial banks". Itar Tass. Retrieved 14 December 2013.

[8] "Agency for deposits' insurance starts paying clients of banks whose licenses were revoked". Itar Tass. Retrieved 14 December 2013.

[9] "A reversal of fortunes for Russia?". Cards International. 13 April 2009. Retrieved 14 July 2022.

[10] "Bank Rossiya Is First Russian Lender Under U.S. Sanctions". Bloomberg. 20 March 2014. Retrieved 21 March 2014.

[11] "TRANSNATIONAL BANKS IN CENTRAL AND EASTERN EUROPE: WHERE DO RUSSIANS WANT TO INVEST THEIR MONEY?" (PDF). Retrieved 15 May 2016.

[12] "Рейтинг банков России". Коммерсантъ. 2020-12-09.

[13] "Russia: Top 10 largest banks, by total assets 2020". Retrieved 1 October 2020.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

Banking in Russia

History

Soviet period

Perestroika

Independent Russia

1998 financial crisis

2008 financial crisis

2010s

Credit and debit cards

Sanctions

Banks

References

External links

Birthday (lagu Katy Perry)

Bradley James

Stasiun Nerima

Tindik pusar

KRI Irian (201)

Julian Noor

FC Utrecht

Gubernur Formosa

Kebutaan

Klub Sepak Bola Jiangsu

Negara Bagian Kachin

Demografi Belarus

Billy Harris

Jiang Chaoliang

Caesar Archangels Hendrik Meo Tnunay

Formasi falangs

Coliseum Memorial

Dalem Tawanan Djepang

Kim Ji-hoo

Borislav Paravac