‘Men of Fortune in Modern Russia.’ (about 150-180 words)
TEXT 3
BANKING IN RUSSIA
Russia has no tradition of commercial banking known in the West. In pre-
Revolutionary times, the development of a capitalist credit system started with the
founding of the Imperial State Bank in 1896. Until the abolition of serfdom,
Russia’s government banks behaved like savings banks, until the mid-1980s, even
the Imperial State Bank depended for its funds mainly on deposits and current
accounts, on which it paid interest, complemented by treasury funds. Its disposable
profits were classed as a source of budget revenue. By 1914, the State Bank network
included 10 offices in major cities and 127 branches. All credits issued by
subsidiaries, however small the credit might be, were approved by the board of the
State Bank, which made operations very slow indeed. The Finance Ministry was the
direct manager of the bank and had the right to dispose of most of the funds. As in
the Soviet system, there were credits directed to favoured clients at low or no interest
rates at all. Debts were sometimes written off and there seemed little distinction
between loans and subsidies. Russia by that time had a widespread of
underdeveloped credit system.
The 1917 Revolution put an end to any further development of banking in
Russia and the sector took a different turn into monobanking, in which the Soviet
Gosbank handed out part of the government’s budget to special channel banks
which distributed it as soft credit to chosen industries and economic sectors. The
only contract with public was provided by the official savings bank, whose many
branches took in all household saving and used them to finance government deficits.
The government, however, did guarantee the savings deposits. That was the only
form of banking experienced by Russians for 70 years, until shortly before the
break-up of the Soviet Union.
In 1991 Gosbank, the leading banking structure, was formally liquidated. The
Central Bank of Russia assumed all the functions of Gosbank in the Russian
Federation. The assets and liabilities were divided between the former republics.
Now all main functions of the State Bank belong to the Bank of Russia.
Almost all deposits are kept with Sberbank (Savings Bank). It has a lot of branches
(about 50.000) all over Russia. Sberbank has virtual monopoly on household
deposits. The main controlling owner of Sberbank is the Bank of Russia.
There are lots of commercial banks in the Russian Federation. They specialise
in lending to different branches of industry. For example, Promstroibank lends
money to construction enterprises. It has many affiliated bodies. The peculiarity of
such banks is that much of its capital base and investment fund was provided by the
State. Promstroibank relies on borrowing from the Bank of Russia which is given at
cheap interest.
Rosselkhozbank primarily financed agricultural enterprises at subsidised
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interest rates. Rosselkhozbank borrows from the Bank of Russia. Part of the interest
rate subsidy is assumed by the Government. The bank is trying to reduce its
dependence for funds in the Bank of Russia by competing with Sberbank for
deposits.
There are joint-stock banks with foreign partnerships. They focus on the
international financial transactions and various types of financial services.
Vnesheconombank is responsible for official reserves, financing foreign trade
and for managing the country’s foreign debt.
Vocabulary
abolition of serfdom
funds
complement
budget revenue
branch
subsidiary
to write off
отмена крепостного права
средства, финансы
дополнять
доходы бюджета
отделение
дочерняя компания, филиал
списывать (долг)
to take a turn into
channel banks
household saving
virtual
affiliated (bodies,
companies)
to rely on
cheap interest
disposable (profits)
soft credit
subsidy
joint-stock
transaction
foreign debt
превратиться, обратиться
банки системы массового обслуживания
индивидуальные (семейные) накопления
фактический, в действительности
дочерняя компания, компания в составе
группы
полагаться, основываться
низкая процентная ставка, букв. дешевый
процент
располагаемый доход
льготный кредит, с низким процентом
субсидировать, субсидия
акционерный
операция, сделка
внешний долг
Exercises
Ex.1. Make a short written summary of the text.
Ex.2. On the basis of the text (and, optionally, some additional
information) prepare a talk ‘System of Banking in Russia: the Past, the
Present, the Future.’
Contents
LESSON 1................................................................................................................................ 3
LESSON 2................................................................................................................................ 8
LESSON 3.............................................................................................................................. 14
LESSON 4.............................................................................................................................. 20
LESSON 5.............................................................................................................................. 27
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LESSON 6.............................................................................................................................. 33
LESSON 7.............................................................................................................................. 38
LESSON 8.............................................................................................................................. 43
LESS0N 9............................................................................................................................... 49
LESSON 10............................................................................................................................ 54
LESSON 11............................................................................................................................ 58
LESSON 12............................................................................................................................ 63
LESSON 13............................................................................................................................ 68
LESSON 14............................................................................................................................ 74
SUPPLEMENTARY TEXTS................................................................................................. 79
TEXT 1................................................................................................................................... 79
TEXT 2................................................................................................................................... 81
TEXT 3................................................................................................................................... 85