Banking in Russia explained

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

The modern Russian Federation inherited the Russian and central operations of the banking system of the Soviet Union, with a few big state banks (like Sberbank, Vnesheconombank, and VTB Bank).

1998 financial crisis

See main article: 1998 Russian 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.[1] 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.[2]

2008 financial crisis

See main article: 2008–2009 Russian 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.[3] 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".[4]

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.[5] State-run Agency for deposits’ insurance paid money to clients.[6]

Credit and debit cards

At the end of 2008, there were 119 million bank cards in circulation in Russia.[7]

Sanctions

In March 2014, amidst the annexation of Crimea by the Russian Federation, 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.[8] Many Russian residents turned to national banks operations although they still have no doubt in reliability of foreign transnational financial institutions.[9]

Banks

Largest banks in Russia in terms of net assets (millions of rubles) as of December 2020:[10] [11]

No.BankAssets, in million rubles
1Sberbank32 421 026
2VTB Bank15 813 216
3Gazprombank7 613 174
44 229 025
5Rosselkhozbank3 539 546
6Credit Bank of Moscow2 988 171
7Otkritie FC Bank2 530 760
8Promsvyazbank2 503 499
9Sovcombank1 576 708
10Raiffeisenbank1 432 353

External links

Notes and References

  1. Web site: Отчет о работе государственной системы банков СССР за 1989 год. Геращенко В.В.. pdf. Центральный банк Российской Федерации. 10 July 1990. 28 August 2019.
  2. Web site: Годовой отчет Центрального банка Российской Федерации за 1992 год. ЦБ РФ. 1993. 5 October 2019.
  3. Web site: Central Bank Cancels 3 More Bank Licenses . Moscow Times. 14 December 2013.
  4. Web site: Russia's Central Bank has no blacklists of banks subject to license revocation - governor. ITAR TASS. 14 December 2013.
  5. Web site: Russia's Central Bank revokes licenses of 3 commercial banks. Itar Tass. 14 December 2013.
  6. Web site: Agency for deposits' insurance starts paying clients of banks whose licenses were revoked. Itar Tass. 14 December 2013.
  7. Web site: 13 April 2009 . A reversal of fortunes for Russia? . 14 July 2022 . Cards International.
  8. Web site: Bank Rossiya Is First Russian Lender Under U.S. Sanctions . Bloomberg. 20 March 2014. 21 March 2014.
  9. Web site: TRANSNATIONAL BANKS IN CENTRAL AND EASTERN EUROPE: WHERE DO RUSSIANS WANT TO INVEST THEIR MONEY?. 15 May 2016.
  10. Рейтинг банков России . Коммерсантъ. 2020-12-09.
  11. Web site: Russia: Top 10 largest banks, by total assets 2020. 1 October 2020.