Banking in Russia (regulations)
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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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[edit] History
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]
[edit] Mandatory requirements for banks in Russia
All banks or "credit institutions" must meet Russian legislation requirements, and comply with Bank of Russia instructions and regulations.
The following are mandatory requirements for banks operating in Russia:
- All reports to fiscal authorities on Russian territory must be in the Russian language only.
- All banks must report client activities to the appropriate Russian authorities, for the purposes of tax returns etc.[2]
- All currency operations conducted by banks or "credit institutions" must be consistent with the Bank of Russia's methodology and reports.
[edit] General Russian ruble payment requirements
Payment transfer transactions which are executed by credit institutions through the Bank of Russia are regulated by a schedule, confined within strict time periods. Before these periods the bank should prepare all necessary information while communicating as necessary, and keep pace with this time period.
Regulations require payment transactions to use special electronic payment formats for each type of payment. Types of payments and their classification are defined by the Bank of Russia.
[edit] Currency operations accounting and control
Currency bank transactions must show the Bank of Russia's official exchange rate as of the transaction date.
Accounting and control of client currency transactions are regulated by a 15 June 2004 Bank of Russia instruction document № 117-И, "About order of delivery currency transactions documents and information by residents and non-residents, order of accounting of currency transactions and drawing up of deal passports by approved banks".[3]
[edit] Currency balance revaluation
Balances on accounts of currency, money funds, and liabilities must be converted into Russian currency, at the exchange rate as of the balance date. The margin between the official rate and the market rate must be included into profits and losses from revaluation of foreign currency.
Revaluation of currency accounts and reporting of such operations in accounting is made in conjunction with Bank of Russia documents, and is mandatory for all banks placed in Russia.
[edit] Cash operation accounting
Cash money operations conducted by banks placed in Russia are strictly regulated by following Bank of Russia documents:
- Regulation of 9 October 2002 № 199-П
- Instruction of 28 April 2006 № 113-И
- Guideline of 11 June 2006 № 1446-У
- Regulation of 5 January 1998 № 14-П
These documents define the whole assortment of cash money transactions allowed to banks, their bookkeeping accounting and how they will do business. One of the requirements of such transactions is fixing and accounting of fund sources and destinations for every transaction at the moment it occurs. Classification of sources and destinations is defined by the Bank of Russia.
[edit] Credit operations accounting
Allocation and repayment transactions are strictly regulated by following Bank of Russia documents:
- Regulation of 31.08.1998 № 54-П
- Regulation of 26.06.1998 № 39-П
- Regulation of 20.03.2006 № 283-П
- Regulation of 26.03.2004 № 254-П
These regulations define classification (reclassification) of credits allocated (repaid) by banks, accounting procedure with credit debts, and the procedure for creating mandatory reserves against possible losses. One of the requirements of such operations is classification and separate accounting of credit debts by periods of repayment, separate accounting of due and overdue liabilities on main credit debt, and on credit rate margin added. Credit classification criteria, procedure for creating reserves and procedure for reporting operations with credit debt are defined by the Bank of Russia.
[edit] Mandatory reserves accounting
Banks placed in Russia must place on deposit in the Bank of Russia their mandatory reserves, in conjunction with the Regulation of 29.03.2004 № 255-П. The responsibility of the bank to fulfill reserve requirements appears at the moment of getting a bank license from the Bank of Russia. This responsibility is a necessary condition for conducting banking transactions. Deposits are placed in special reserve accounts separately by ruble and foreign currency liabilities. Regulating of reserves volume on deposits requires reports every month in conjunction with rules defined in the above document, and based on the accounting data of the bank.
See also Bank reserves
[edit] Anti-money-laundering activity
There is legislation to stop money laundering, by giving the national bank oversight of various banking operations.
[edit] Banks
- Further information: List of banks in Russia
