Banking in Russia
There are significant regulations for banking in Russia. Banks in the Russian Federation should meet mandatory Russian legislation requirements, and comply with numerous Bank of Russia instructions and regulations.
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The modern Russia 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.[1]
On March 22, 1991, the Central Bank of Russia established the procedure for the issue of securities by commercial banks. From that time, Russian banks gained an outlet to the stock market. On April 2, 1991 the "Regulations for Buying and Selling (Transferring) Currency Exports Abroad through Citizens' Personal Funds" approved by the State Bank of the USSR entered into force. In this way, the creation of the Russian foreign exchange market began. And on April 9, the first auctions on the State Bank's currency exchange were held. Ten commercial banks and one financial organization took part.
Large banks lost between 14 % and 45 % of their retail deposits. An exception was Sberbank, which kept the large majority of its rouble-denominated accounts, but lost over 30 % of its USD-denominated accounts. To protect savers, CBR offered to transfer savings from insolvent banks to Sberbank, since deposits at Sberbank were insured. Also dollar accounts were transferred to Sberbank at a rate of 9 roublesper dollar much below the market rate, so that customers lost an estimated half of the value of their dollar deposits.
On September 3, 1998, during the 1998 Russian financial crisis, private accounts at the SBS-Agro and MENATEP banks, Inkombank, Promstroibank, Most Bank, and Moscow Business Bank were frozen. Depositors at these banks were given the opportunity to transfer their money to the Sberbank at the rate of 9.33 rubles/$. This action continued for one month.
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 Oct. 15 in the first bank run of the current global economic crisis [2].
- Further information: List of banks in Russia
