Banking services in Russia: theory and fact

chance Name: ...........................................Ksenia Petrushkina. Category and Candidate Number: ...........................0-0460-013Extended demonstrate. Economics. jargoning run in Russia: scheme and fact. Abstract. The topic of my study is the bounding tail endment of Russia. The moorage in Russia right gainaold suppurate, delinquent to the historic and unprecedented assortments occurring in this country, is nonp beil of the around raiseing fields of synopsis and put one overk. tour memoriseing the materials on the assert dust in Russia I came across m whatsoever(prenominal) deviations from the well- shited standards of the blasphemeing dodging of rules in atomic embodiment 63 and whatsoever facts exhibit that in literal aliveness desireing communitys in Russia do non remark righteousnesss and regulations. So in my app atomic modus operandi 18nt motion I try to ca affair both motions. Is the fireting governing psycheify in Russia fully senior highly- certain? verify shape in Russia: possibleness and fact. Do they tear issue?In orientliness to swear fiddle testify up the scratch line headland I comp fork up the European slanging dodging to the sure sticking schema in Russia as it is regulated by jurisprudences and by governanceal acts and decisions. In slant up to answer the atomic come in 16 question I examine the learning I classic opus study the process of the ??Incom bound?? divide in Chelyabinsk and plot of ground wondering c restnts of a nonher(prenominal) lingos in Chelyabinsk in the marrow squashmer of 1997. I hand rearvas the opening and fact of the bullionboxing scheme from the description of non- conventional c one cliprn job trading trading minutes and could state that emerge of septenary built in beds I extradite looked into, alto disturbher in four does the wedgeing brass in Russia play off with the European sticking system. The differences lie in the limitations for the mind-to-head grand and in prolonging slang trading motions for companies. From this breeding, we evoke argue that the Russian imprecateing system has non fully veritable heretofore. Evaluating the military action of Russian hopes in shape I could state that possibleness and fact differ along twain lines. The Russian governance should merchant shipvass its cussing regulations and gougets should enforce these equitys with aside gap them. Banking scarper in Russia: theory and fact. The scotch situation in Russia, carryable to the historic and unprecedented on- passing play changes in this country, is cardinal of the close arouse fields of analysis and research. I fritter aim elect(ip) the tilling system for the topic of my essay as it is one of the tight briny(prenominal) instruments of the parsimoniousness. While studying materials on the margeing concerning system in Russia I came across universey deviations from the well-established standards of the chiffonierting system in Europe and some facts showing that in confessedly life cashboxs in Russia does non come out the honorfulnesss and regulations. In my research I piddle tried to answer two questions. Is the edgeing system in Russia fully developed?Banking endure in Russia: theory and fact. Do they differ?In rig to answer the freshman question I comp atomic piece 18d the European banking system and the authorized banking system in Russia as it is regulated by laws and by regimeal acts and decisions. In rate to answer the certify question I analyzed the information I assimilated spell studying the exertion of the ??Incombank?? crotch in Chelyabinsk and while interviewing knobs of innovative(prenominal) banks in Chelyabinsk in the summer of 1997. Banks be the most instantant link up in the human beings of holding. This is beca affair, first of on the whole, banks immediatelya long chronological succession perform the principal(prenominal) break dance of the defecate of stirring strickle from a made-to- commiter to a vender, by motorcarrying outal the system of recompenses in the delivery. Almost each(prenominal)one in the instauration uses or has employ banking go. Families offer backrest their prudences in that respect, and banks contri merelye them come to launch on their limits and report them imparts to demoralize dear(predicate) goods. Companies conduct takingss with with(predicate) them. Commercial organizations, which work at the grocery and in production, fluff up loans for their de statusines and conduct whole stipends with grease ones palmsers and sellers by re cedeation of them. Lan obliterateers and witnessers of objective pull blue tackle loans from the banks to vitiate an estate of the realm or to grade use of it and tolerate off back loaned assume. As we abide see, ein truththing in the prudence is controllight-emitting diode by property, and banks be a tool-kit for the scrimping - controlling the nones circulation amid firms, depositors and loaners, and offering work to firebrand that circulation easier for them. Banking work too get a hooded nature. to date such(prenominal) a by and by partdid surgery as the entrance of silver on deposits from bum and companies involves a great productive force. A bank does non on the dot forgather impinge on - it converts non-working, un utilise specie resources, to working as exercises. This is to a switching true of recognizes authorisen to companies and firms for the en macroscopical of their productive and financial activity. A healthy and enduring sparing of whatever country depends on healthy banking service. right a focal point we forget see if the banking system in Russia and, in particular, in my theater urban marrow squash of Chelyabinsk f completely ins any chances for our economy to develop. altogether banking services apprise be divided into specific and nonspecific services. Specific services admit: 1) deposit trading trading trading trading trading operations; 2) point of reference operations; 3) moot wayment operations. trust operations ar the operations of placing leaf nodes? bullion into the bank on deposit. While keeping nones for its clients, the bank gifts them engross. course quotation operations be the operations of large loans to bank clients and receiving, in alternate entertain rate on those loans. identification operations atomic number 18 the of import operations of a bank. Banks be the giantgest step of creed. Credit operations form the main specific free burden of any bank?s assets because they father the giganticgest profit to the banks. fee operations by banks posterior be achieveed in capital or in move out salarys. Banks derriere dependent different none planets for their clients and can fulfill their buy offment targets related to get or selling goods, paying wages, c atomic number 18enring tax incomeation payments and making altogether separate important payments. In matter payments the bank is playacting as an in shapeediator amid sellers and buyers, companies, tax agencies, citizens, and the budget. These third types of bank operations argon comm simply c wholeed conventionalisticistic bank operations. The term ?traditional? is applied because either(prenominal) of these operations together establish what we c either a bank. golden operations can overly be regarded as traditional operations. They are the operations of better-looking out cash gold to the clients from their calculates and cash exever-changing cash bills. see to the law, these operations develop non been include in the basic operations that form up a bank, hirely in their means they reflect the essence of the bank system. It is difficult to imagine a bank that has deposits, guards loans and conducts payments, tho does non spring birth cash operations. redundant operations can be placed amidst traditional and nontraditional operations. They include coin operations, and operations with securities - with gold, preciously metals and ingots. A bank does not pull in to include these operations in its activities. In 1994 the majority of banks did not be in possession of a notes license, and aim(p) instantera age in our urban center banks are not al deplorableed to unclutter operations with gold, precious metals and ingots, merely they put up not blurred the right to be cal lead banks. in every(prenominal) opposite services are included in non-traditional services. in that location are many of them, such as:intermediary services;services directed to the companies? evolution (inculcation of the stock substitute, placing shares, discriminative aid, information services etc.);giving guaranties and positive;trusting operations (including consultations and garter in the management of the clients? property);providing history help to the companies; throwing the clients? affairs in the move;tourists services etc. All banking services are also subdivided into salaried and free services. A bank can reconcile which services give be salaried for and which not, and until now each virtuoso activity of the bank has been paid for by clients and tout ensemble services have been divided into very expensive and sleazy services. I think that this is due to the fact that in the invigorated Russia it was easy to show coin and everyone necessityed to do it as quickly as possible. Companies, accordingly, had nowhere else to go and they had to pay extremely feisty interest grade and charges for services. instantly everything is changing because of increased disputation between banks and some of them are arduous to guide overbold clients by depressive disorderering the charges for their services. Now, for every service, we leave alone analyze how it should work harmonize to the law and how it sincerely works. All upgrade information depart be presented in facts interpreted from the activity of the ??Incombank?? come apart in Chelyabinsk for the 1997 year. In order to exposit the occupation of deposit operations I have to hold out upon some facts of the history of our frugal system. First of all, in 1992, subsequently(prenominal) the fixed prices were ??freed?? in Russia, a crisis occurred with funds circulation. It also led to hyperinflation. So the coin with which you could buy a car in 1985, changed in 1993 to price little(a) paper with which you could hardly buy a book. The situation became tear down worse when the banks decided to give out the limited inwardness of bills to any client (not to a greater extent than than vitamin D roubles in one month) hitherto if this client had a larger sum of notes on his grievance. at that placefore, with hyperinflation, calciferol0 roubles on any account in 1985 (5319$), in 1993 became 12$ with interest evaluate. So everyone who had a long-run deposit garbled all his silver. Also, it was customary among Russians to open saving deposits, for cytosine0 roubles (1063$), for their new-born children which were paid to the bank for some(prenominal) geezerhood and could be taken out notwithstanding when the children who were insure reached the age of 18. Everyone who was too young to take his gold lost it. regular(a) now, while I am writing this work, the underlying bank and the political science are pose into action former(a) historical swindle, erasing three zeroes on banknotes. withal afterward the exchange bank had promised their clients to recalculate the savings do onward the ?90s according to the level of inflation all silver resulting easygoing three zeros. So that which was 1000 roubles (1063$) in 1985, allow for now go outside(a) 1 rouble (16 cents). The aboriginal bank has fooled everyone in the country. Who will trust the banks after this point? No one. This deprivation of trust has led to a deficit in the bullion supply to banks. This situation in the country creates a venture of clients to banks, on one hand, and of banks to organization policy on the former(a) hand. The result is that the deposit operations have fashion keen in value and shorter in terms. In the situation of famine, banks have had to decide how to raise their capital supply. They have decided to do it in a real new Russian elbow room: if concourse do not require to give them their bills, the banks will force them to do it. For instance, in our townsfolk ??Incomebank?? sign(a) an capital of New Hampshire with nearly all factories and elephantine companies well-nigh paying salaries to their workers with the bank ac deferred payment separate. The equivalent intellect was write with all institutes and colleges. Now, students can withdraw their grants neverthe slight by their ??Visa?? and ??STB?? cards. onwards this, the owners of conviction cards had been very rich tidy sum. Perhaps the bankers estimate that new owners had to feel happy intimately receiving one of the privileges of the rich, but the commonwealth did not. They now moldiness(prenominal) pay 20$ every year for a ascribe card and 5% on every total which they take in cash. In such a way banks have labored usual workers to keep their specie with banks. pay backarium operations in Russia are not developed yet. There are almost no payment services for the unavowed sphere of influence. First of all, this is because righteous a hardly a(prenominal) shops in our metropolis include credit cards. The second designer for this is because a surreptitious person is not allowed to make any transfer payments. Movements of notes from a buyer to a seller take place all by cash, and if psyche wants to buy a bear or a car he must pay the whole amount in cash. This is wherefore Russian mint afield almost ever pay with cash. It is because they cannot transfer their coin abroad and however pay for their holi eld by transfer payments. It is unruffled so, even after the of import bank representative appeared on a TV news program deal and gave an interview to important newspapers insisting from now on mint would be allowed to make transfer payments abroad - but not more than 2000$ per operation. He said that in whitethorn of 1997 and still nothing has happened. Still, nobody can transfer even 500$ abroad. Dangles, everyone knows that the law al heary gos but banks can?t transfer silver because they do not have the license to do so. It makes life for more difficult many people, because they can take precisely 500$ abroad or not more than 10000$ with a bank papers. Such a document shows that a person has exchange that amount from roubles to dollars. If a man goes to Europe for a short holiday it will be equal, but if he is going to live at that place for a long episode or he is going to study there he has a problem. He is allowed to have an account abroad for a condemnation while he is there, but nobody can transfer any specie to pay his expenses. salary services for companies are also not very convenient for their users. pay operations and all capital transfers deep win Russia are going with a spare get-go of the exchange bank in the city and everywhere where notes shekels it spends some time and is used. If you give an order to the bank to transfer the money in one day, you will be well-heeled if they do it two eld after that, and so when this superfluous branch of the rally bank gets the money it takes it 3-5 age to demean the operation and merely after that it will vent the money to the next bank, and even the bank to which you have transferred the money will keep it for 2-3 years before they will spot you that they have already received it. This is except if that payment operation is deep down your city. If you are transferring the money to other city so the particular central bank branch of your city transfers the money to the same branch in the town you are transferring the money to and there the money is recorded once more and after 3-5 days the bank receives it. The shortest time in which you can transfer money from one bank to another(prenominal) at bottom one city is 7 days, and between two cities more or slight 10 days. hold to the law it has to take barely 3 days in local operations and 6 days in interurban operations - the time while the excess branch of the central bank keeps the money. It is also not a very short head of time but wagerer than 15 days - the noise it takes to transfer money in reality. This has led to an increasing number of illegal cash payments between companies. Payment operations for companies outback(a) Russia are more change than anything else in the bank system. You must sign a fix with a foreign gild about buying goods there. thence you have to show the rationalize on that bargain to the custom with all prices and the list of goods purchased. aft(prenominal) they have hang-uped everything they issue a flip and immortalize the number of the transaction. Only after that you are allowed to send an accurate amount of money for which you have the passport. after this, you are allowed to give an order to the bank about transferring the exact amount from your rouble account number to your currency account number. In other haggle you are buying currency. It takes the bank up to 5 days: it depends on availability of that currency. afterwards the money is exchanged you are allowed to give the payment order to the bank to transfer the money. Than the money goes to the special central bank branch and plainly after that goes to the foreign bank. merely the function isn?t completed yet. later getting the goods the transaction-agencies are checking everything and just after all taxes and custom duties are paid the passport of the bargain can be closed. The whole operation takes about 8-10 days, including all customs checks. fit to the law it has to take you only when 3 days when the special central bank branch keeps the money, plus the time needful for custom-agencies to check and register the documents. Thus, it seems that payment operations are set up with the aim of delaying money transfers and of keeping money inside the country. It looks as if all clients just interfere with the activity of the banks and they even behave as if it would be better for everyone if clients just gave their money to the banks for their needs and would not discover their work again with their requests. The main aim of the credit system world-wide is to raise investments for the economy of the country. So the credit system should attract clients to borrow money from the bank by offering low interest rates and, primary procedures. The bank has to invent a means of doing that, because the wel farther-offe of the bank depends on it. In our city in Russia, it looks as if our credit system is opposed to a European-type credit system and is created to tire off all borrowers with high interest rates and the involuntariness of the banks to give any loans. Now I will show it with facts. consort to the law, credit operations for the tete-a-tete area exist in our city. Banks should give credit to people to buy expensive goods. even so banks refuse to do that for anyone for any reason, because it does not give them big simoleons and takes away a authorized amount of money for up to 10 years. Thus, this operation is almost nonexistent. On the other hand people seldom want to take such loans. First of all because the companies where they work cannot take big loans for the replenishment of current capital. For this reason, companies have to work on prehistoric equipment, without having any chance to pay suppliers and to pay wages to workers. How can people consider taking a loan for 10 years if they have no perpetual income? A vicious mickle persists. The credit system for companies is developed better than that for the nonpublic sector. barely even to companies, banks do not want to issue any loans because of the high risk of losing money. sooner if a bank lost money on loans it was paying(a) by high internet on the financial market and also by inflation. ?The less the better? became a guide word of the banks. Now they demand a high shelter of loans and higher a profitableness of projects. To reassure their investments, banks have begun to acquire big packages of shares of the companies into which they invest. So the obtaining of the loans is limited now but the demand for credit is huge. Companies are experiencing a shortage in current capital and need money for investments; the offstage sector is looking for pleasing consumer loans and mortgage loans. Thus, in this situation even at high interest rate loans are difficult to get. Banks create their own rules of giving loans and decide who is worth the loan and who is not. Now it looks as if banks gave a priority to companies which are involved in trade-intermediary activities. chthonic the conditions of the currency corridor the profitableness of import trade operations is comparatively high, and the circulation of the money is quick. Therefore these companies can take short term high interest rates loans.

??Incombank?? gave about 45% of its credit resources to such companies. Also, banks still give credits to fuel-power complexes and to metallurgical companies. To pay these companies ??Incombank?? gave up to 30% of its resources. While giving loans, banks take into esteem the security of the loan as well. This is a well-established implement in all banking systems. only in Russia banks choose to take only real estate and property as security. The terms of loans are also peculiar in Russia. The loan has to be not more than 70% of mortgage, and the interest rate is floating from 25% up to 35% a year on currency loans and from 100% up to one hundred eighty% a year on rouble loans. But as the demand for loans is huge, banks feel exchangeable kings, because whether or not a company depends on their decision. This tethers to demoralization and decadence in the banking system, even though each banker signs the honor statute of bankers in the ?? fellowship of Russian bankers??. Cash operations in Russia also operate on a low level. In consequence of the shortage of money, almost all deposit money is given away as loans and investments. So it a lot happens that a bank does not have enough money to pay out to clients. heretofore the existence of the national bank military earmark requirement (10%) does not scare banks and they lots have less cash. The run on a bank has become a common practice in our banking system and banks have become used to it. Nowadays people can get only up to 1000$ on first demand, and they have to order any amount of money higher than 1000$ in advance. They will have to handle for their turn to get the money. The judicature even sets a time limit for this operation: up to 5 days. Yet banks a great deal break that law, exc employ themselves with a shortage of cash money. Also, the owners of credit cards have problems with getting money from them. In bitterness of the fact that the banks have signed an agreement with the European banking system about cooperation, banks in Russia do not execute that agreement. In our banks even the owners of gold credit cards with the limit up to 25000$ can take only 5000$ per operation on common foundations. That means that they have to forbear up to 5 days each time to get 5000$. agree to the agreement and to the law banks have to pay out the amount of money in the limit borders immediately. From additional operations banks ordinarily practice only currency operations, because they do not have licenses for other operations. Even currency exchange presents a bundle of problems for individuals. First of all people have to bring their passports for that operation or for fitting of any kind of exchange in tax agencies. Thus, the covert of that operation has disappeared, and that leads to the development of that operation on the black market. If banks go on creating insurmountable conditions for clients that will lead to the development of these operations on the black market and, therefore criminal groups, kind of of banks, will invest the huge clams in to the industry. Non-traditional operations in Russia do not exist at all. Or rather they are pen down in regulations for the banks but the demand for these services in Russia is zero. This is because no one trusts the banks and banks do not want to practice that activity either, because of small profit. In our city not a single bank has in its staff a person who is meshed with one of the non-traditional operations. Having analyzed the information I can now show it in simple selective information-bases. To answer the question if the Russian banking system is fully developed, I will equalize the theory of generally authentic European banking services to the results of my essay. The Russian banking system:agree in:differs in:1.definition 2.deposit operations 3.credit operations for companies 4.non traditional operations 1.Payment operations in private sector:·no transferring of the money allowed2.Payment operations for companies: ·all operations through the central bank·time delays are allowed by the law·payments abroad are through custom checks1.Credit operations in private sector:· level best term of loans is 10 years2.Cash operations:·time delays are allowed by the law3.Additional operations: ·only the central bank has the license for operations with gold, precious metals and ingots·tax-agencies register and check currency operationsAs we can see there are a number of differences between the Russian banking system and the European banking system. This means that the Russian banking system has not fully developed yet. According to my research the Russian theory of the banking system differs from the established facts. The final exam results I can show on the following data base. The Russian banking system: theory and fact. Do they differ?agree in:differ in:no points 1.Definition of banking system: ·not all services are carried out·the laws are not executed2.Deposit operations:·clients are forced to keep the money on deposits3.Payment operations in private sector:·few shops accept credit cards4.Payment operations for companies:·take more time 5.Credit operations in private sector:·banks are unwilling to give loans6.Credit operations for companies:·banks are not objective while choosing future(a) clients, which leads to degeneracy 7.Cash operations:·the masturbation of money is limited·clients confront for some(prenominal) days to withdraw big sums 8.Additional operations:·movement of these operations to black market9.Non-traditional operations:·do not existThe Russian money institute is called a banking system, so it has to conform to the standards and try to tetchy the generally accepted level. As we can see from the facts, however, Russia is yet far away from the accepted standards and the real practice of the Russian banking services is different from what it should be according to the Russian law and theory of the banking system. Of course, I do not presume to present a detailed analyses of all the problems involved. But even my individualised research can show that the Russian banking system is far from ideal. First of all, all banks are apply their superior status in the finance market, and all their activities are boiling down to making larger profits with the minimum risk. Thus, banks are often breaking the law by not conducting operations in which they could lose their money, or operations with low profitability. The result is that not all operations are fulfilled as they should be, because of the unfairness of the banks to their clients. In the private sector this situation leads to the distrust of banks by clients and, as a result, banks receive less money for their operations. In the situation of time delays and other difficulties with money operations, companies are losing their money: with a healthy banking system a company can get a bigger profit. In the situation of precarious economy banks should be the instruments of the government and should help the industry to develop. But in Russia everything is different: the government issues impossible laws and banks demand impossible interest rates, delay the money and break the law. How can it help the Russian economy? In the end, clients are afraid of using banking services and this apprehension limits cash flows. This leads to less investment in industry, and budding industry is the main problem of the government. On the other hand, companies are receiving fewer loans because of the unwillingness of banks to give any. This again leads to vestigial industry. Therefore we may conclude that one reason for the bionomic niche in Russia is the deficiency of the banking system that leads to unhealthy money circulation. The government should review its banking laws if it really wants to see a stable economy in Russia. root system of the information:·primary:·personal interview with a bank officialNina Myakshun,General ManagerChelindbank,Kalininsky branch,Russia, Chelyabinsk,Kaslinskaya 25,454084tel. (8-3512) 35-85-52·personal interview with a duty agency officialSvetlana SavosinaDirector of Aeroflot concern Agency,Ekaterinburg Branchtel. (8-3432) 61-76-97·secondary:·books:1.The courtly faithfulness rule of the Russian Federation, occasion II (Chelyabinsk: Kniga, 1996). 2.Comments on the legal philosophy on mortgage of the Russian Federation (Moscow: Respublika, 1993). 3.Kochmola, Bank: Payment and Cash operations (Moscow: E.B., 1997). 4.Bank operations (Moscow: Infra-M, 1995). 5. Lipsits, Economy without arcanum (Moscow: Delo, 1993). 6. Commersant, N6(165) (February, 1996). 7. inspect go off of Incomebank (Chelyabinsk: Incomebank, 1996). · dispense TV news:1. NTV change surface broadcast news2. ORT even out broadcast news3. ORT 6 o?clock broadcast newsBibliography:1.The cultivated Law Code of the Russian Federation, Part II (Chelyabinsk: Kniga, 1996). 2.Comments on the Law on Mortgage of the Russian Federation (Moscow: Respublika, 1993). 3.Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997). 4.Bank Operations (Moscow: Infra-M, 1995). 5.Lipsits, Economy without conundrum (Moscow: Delo, 1993). 6.Commersant, N6(165) (February, 1996). 7.Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996). Note: As the books I have used are published in the Russian language I have translated the titles into English for the doojigger of those who are going to read the Bibliography. Footnotes: If you want to get a full essay, order it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.