The tasks and functions of the Bank of Russia
are set by the Constitution of the Russian
Federation and Federal Law on the Central Bank of the Russian Federation
(Bank of Russia). The Bank of Russia’s main objective is to protect the rouble
and ensure its stability. The Bank of Russia is also the sole issuing centre
and the body of banking regulation and supervision. Its main functions are
formulated in Article 4 of the Federal Law on the Central Bank:
- in collaboration with the government of the Russian Federation, it elaborates
and implements a uniform national monetary policy designed to protect the
rouble and ensure its stability;
- it is the only issuer of cash and the organiser of its circulation;
- it is the creditor of last resort for credit organisations and organises the
- it sets the settlement rules of the Russian Federation;
- it sets the rules of conducting banking operations and accounting and the
reporting rules for the banking system;
- it conducts state registration of credit organisations and issues and revokes
the licences of credit organisations and the organisations that audit them;
- it supervises the activities of credit organisations;
- it registers the issue of securities by credit organisations in accordance
with federal laws;
- it conducts, on its own behalf or on behalf of the government of the Russian
Federation, all kinds of banking operations necessary for the Central Bank’s
implementation of its main duties;
- it conducts foreign exchange regulation, including operations to buy and sell
foreign exchange, and establishes the procedure for effecting settlements with
- it organises and exercises foreign exchange control on its own and through
authorised banks in accordance with the laws of the Russian Federation;
- it participates in making Russian Federation balance of payments forecasts
and organises the drafting of the Russian Federation’s balance of payments;
- it analyses and forecasts the state of the Russian Federation’s economy as a
whole and by region, concerning specifically monetary, credit, foreign
exchange, financial and price relations, publishes the corresponding materials
and statistical data and performs other functions in accordance with federal
The Bank of Russia co-ordinates and
regulates settlement relations in Russia and establishes the rules,
forms, deadlines and standards for non-cash settlements obligatory for all
legal entities and natural persons. The forms of non-cash settlements are determined
by the Civil Code of the Russian
principal forms of non-cash settlements today are payment orders and, to a
lesser extent, payment requests (for collection). Letters of credit and cheques
are used on a small scale.
A part of
settlements is effected by legal entities and private individuals using payment
cards, which are gaining ever wider acceptance.
The Bank of
Russia is making efforts to ensure the effective and uninterrupted functioning
of the settlements system and enhance its reliability.
settlements are effectuated through correspondent accounts opened with the Bank
of Russia, correspondent accounts opened by credit institutions with one
another, correspondent accounts opened with non-bank settlement credit
institutions and through the system ofintrabank settlements, using inter-branch
legislation accords the Bank of Russia a special place in the country's
payments system. The Bank of Russia not only ensures general guidance of the
payments system and provides the methodology and organisation of settlements,
but also directly participates in this system, effecting interbank settlements
through its divisions.
payments made through the Bank of Russia settlement network account for a large
part of the payments turnover.
participant in the settlements effected through the Bank of Russia settlement
network is awarded an identification code. The Bank of Russia keeps the Russian
Federation Bank Identification Code Directory (BIC Directory), which contains
the following data: the name of each credit institution participating in
settlements and its bank identification code, correspondent account with the
Bank of Russia and domicile.
Directory is regularly reviewed and updated.
The credit institutions
located in the Russian Federation (resident credit institutions) and having the
banking licence of the Central Bank of the Russian Federation open only one
correspondent account with one of the Bank of Russia institutions (a cash
settlement centre or operations department), which services them. The branches
of credit institutions may have correspondent subaccounts to implement
settlements and may not have such accounts. If they don't, they effect
settlements through the correspondent account of their parent organisation or
the subaccount of another branch.
the Russian payments system comprises about 1,400 resident credit institutions,
more than 4,000 branches of credit institutions and nearly 1,200 subdivisions
of the settlement system and it is the principal means of implementing the
official monetary policy by the Bank of Russia.
settlements of clients of credit institutions and their branches are effected
from the bank accounts opened with these institutions. In special cases,
stipulated by the law, legal entities may have accounts opened with Bank of
institutions and their branches with correspondent accounts and subaccounts
with the Bank of Russia effect settlements for their clients for commodities,
works and services and make tax and other compulsory payments and their own
income payments to the budget and payments to the accounts of state
extrabudgetary funds through the various divisions of the Bank of Russia
As for the
settlements between clients of one credit institution (branch), they are
effected by writing off or entering funds to the clients' corresponding
accounts, bypassing the correspondent account of the credit institution (or its
branch's subaccount) opened with a Bank of Russia institution.
between the cash settlement centres of the regional divisions of the Bank of
Russia, serviced by a single computer centre, on transactions of credit
institutions (or their branches) and on their own transactions are effected
through the accounts opened specially for this purpose.
correctness of settlements effected by the cash settlement centres is confirmed
by the concurrence of the initial and reply turnovers in the process of
confirmation, that is by comparing each reply entry with the initial one.
are effected if there are funds in the correspondent accounts of credit
institutions or subaccounts of their branches and within the amount of these
funds. If a credit institution (or its branch) has not enough funds to meet all
claims made on it, funds are written down from its correspondent account or
from the subaccount of its branch to effect payments for its clients and its
own payments in the order established by the Civil Code of the Russian Federation.
In this case, documents are put into the file of unpaid settlement documents,
attached to the correspondent account of the credit institution or the
subaccount of its branch.
effected through the Bank of Russia settlement network are based not only on
paper, but also electronic payment documents. These are the so-called intra-
and interregional electronic settlements. The latter are regulated by the
Provisions on Inter-Regional Electronic Settlements Effected through the Bank
of Russia Settlement Network. The exchange of electronic documents through the
Bank of Russia settlement network is regulated by the Provision on the Rules of
Exchange of Electronic Documents between the Bank of Russia, Credit
Institutions (Branches) and Other Clients of the Bank of Russia in Effecting
Settlements through the Bank of Russia Settlement Network, adopted in March
divisions of the Bank of Russia settlement network participate in electronic
settlements as the bodies registering and supervising payments.
institutions, their branches and other clients of the Bank of Russia that have
correspondent or other accounts with the divisions of the Bank of Russia
settlement network may use electronic settlements. This helps accelerate money
turnover and reduce the amount of funds in settlements.
"electronic payment document" (EPD) is used in effecting electronic
settlements in the Bank of Russia settlement network. The EPD is a document
that serves as a legal basis for conducting operations with the accounts of
credit institutions (branches) and other clients of the Bank of Russia, opened
with a Bank of Russia institution, bearing an electronic digital signature and
having equal legal force, stipulated in an agreement with the Bank of Russia,
with paper based payment documents signed by the authorised persons with their
own hand and stamped.
the electronic payment documents presented for execution to a Bank of Russia
institution must contain the requisites in accordance with which operations
with accounts are conducted. Two kinds of EPD may be exchanged:
EPD containing all requisites of a payment document, including textual
EPD containing the requisites necessary for conducting operations with accounts
in a Bank of Russia institution.
transfer of funds using fall-format EPD does not require accompanying payment
documents on paper, while the transfer of funds using abndged-format EPD must
be accompanied by an exchange of paper based payment documents, filled out in
accordance with the established procedure.
the Bank of Russia plans to phase in a paperless technology in its settlement
system, using full-format electronic payment documents only in the exchange of
electronic documents between Bank of Russia institutions and between the Bank
of Russia and credit institutions.
January 1,1998, the Bank of Russia charges a fee for its settlement services.
Some kinds of settlement operations are conducted by the Bank of Russia free of
settlements effected through correspondent accounts opened by credit
institutions with one another play a part in the general payment turnover.
of settlement operations with correspondent accounts of credit institutions
opened with other credit institutions are formulated in the Bank of Russia
Provisions on Effecting Non-Cash Settlements by Credit Institutions in the Russian Federation,
which came into effect in 1998.
operations conducted with correspondent accounts of correspondent banks are
divided into two types: operations to service clients and own interbank
development of correspondent relations depends on various factors, such as
mutual payment flows, price and demand in the credit market, the possibility of
participating in trading in the regional government securities markets and on
currency exchanges and the risk levels.
settlements in correspondent relations are effected with credit institutions in
CIS and other countries.
through clearing institutions are one of the means of interbank settlements.
development of clearing settlements depends on the financial condition of
credit institutions and the state of the money markets. Eight settlement credit
institutions have been granted permanent licence as clearing houses.
operations are based on a clearing model requiring the participating banks to
make preliminary deposits in their accounts with the clearing institution.
2,000 credit institutions and their branches and other corporate clients effect
settlements through non-bank clearing institutions.
The Bank of
Russia has a decisive role to play in elaborating the principles of organising
clearing operations and monitoring compliance with these principles.
settlements are gaining acceptance. They include settlements between a head
office of a credit institution and its branches and between branches of a
credit institution. The procedure for conducting settlement operations with
inter-branch settlement accounts in Russia
is established by the Bank of Russia Provisions on Conducting Non-Cash
Settlements by Credit Institutions in the Russian Federation.
strategy for the development of Russia's
payments system was elaborated in 1996. It sets forth as the main objectives of
the reform of the system further modernising settlements, upgrading banking
technologies, introducing new instruments of payment, raising the standard of
services provided to credit institutions and other organisations and creating
conditions for liquidity management.
the banking technology of implementing settlements onto a qualitatively new
level, new methods are being developed, new rules and regulations are being
enforced, new technologies are being introduced and new organisational
principles are being established. Efforts are also being made to accelerate the
introduction of electronic documents and build an advanced automated real-time
system of settlements.
end, steps are being taken to determine the status and functions of individual
subsystems for the implementation of settlements, enable credit institutions to
manage their liquidity more accurately, develop and introduce formats of
electronic documents and settlement documents on paper, stimulate the functioning
of clearing institutions, improve conditions for the introduction of bank
payment cards in order to reduce the amount of cash in circulation, and
elaborate regulatory rules in these areas.
The Bank of
Russia division responsible for ensuring methodologically and organisationally
the efficient and uninterrupted functioning of the national payments system is
the Methodology and Organisation of Settlements Department.
accordance with its Statute, the Department ensures the implementation of the
main tasks involved in developing and upgrading the methods of non-cash
payments in the Russian
Federation, elaborating a concept of
development of the Bank of Russia payments system and organising supervision of
the Bank of Russia settlement divisions and other settlement systems.