The successful development of the economy of most countries of the world depends on the effectiveness of the banking system operating in the state. What is its specificity? What are the infrastructure elements of the corresponding system?
What is a banking system?
Let's start with the essence of the terms in question. Under the banking system understand the totality of financial institutions - banks and other credit organizations operating in the jurisdiction of a state. The relevant elements of banking systems are usually classified into 3 main categories:
- national banks;
- commercial credit institutions at the federal level;
- local financial centers (open in regions, municipalities).
It can be noted that in most modern states, including Russia, 1 national bank has been established. In our country, the Central Bank performs the corresponding function. In turn, there may be many commercial credit institutions in the state. But what is the essence of both types of financial organizations, as well as the specifics of the functioning of these elements of the banking system? We will study this issue in more detail.
What is a national bank?
Let's look at who is responsible for the country's foreign exchange fund. The National Bank, or the Central Bank, is a key organ of the financial system in the economies of most countries of the world.
Its functions are mainly regulatory. They are most often related:
- with issue of national currency;
- with the implementation of credit policy;
- with the provision of settlements initiated by various entities of financial legal relations;
- with the supervision of the activities of private credit institutions;
- with refinancing of loans issued;
- with the disposal of gold and foreign exchange reserves of the state.
The noted functions of the Central Bank characterize the activities of the Central Bank of the Russian Federation. It can be noted that the main Russian bank is state-owned, but is characterized by a rather high degree of independence from other federal structures.
There are central banks mostly private. These credit and financial organizations include the US Federal Reserve. The capital of this institution is formed by contributions transferred by commercial banks. Consider the specifics of this type of financial institutions in more detail.
What is a commercial bank?
Along with the Central Bank, another key element of the banking system is a commercial bank, legally independent of the country's authorities (but at the same time, government participation in the ownership of the assets of the respective credit and financial organization is allowed). One way or another, the bank should be independent in terms of making decisions on capital management.
The corresponding type of institution provides various financial services. A commercial bank is an element of a credit and banking system that:
- provides loans to citizens, organizations, budget institutions, sometimes other banks;
- refinance loans;
- carries out various transactions, for example, on payments from some individuals and legal entities to others, transfers to the budget system in the form of taxes and fees;
- gives opportunities for placement of deposits;
- promotes investment in various assets.
The Central Bank, as we noted above, performs a function related to the exercise of control over the activities of commercial financial institutions. Thus, the activities of the latter are sufficiently strictly regulated. As a rule, the commencement of work of a commercial bank is possible only if there is a license issued by the Central Bank, as well as subject to successful passing checks by the main credit and financial institution of the state.
Let us now examine in more detail what is the characteristic of the elements of the banking system considered by us. First of all, it is useful to pay attention to their functions in relation to the Russian economy.
Functions of the elements of the banking system in the Russian Federation
In Russia, there are all the basic elements of banking systems: the Central Bank, commercial credit institutions of a federal scale, as well as local financial institutions. The main organization with the largest range of powers is the Central Bank of the Russian Federation. Its main functions we have identified. Among those the implementation of emission policy, foreign exchange regulation of the economy, regulation of financial relations, the establishment of legal norms and performance standards of private credit institutions.
The following key structural elements of the Russian banking system are federal private credit and financial institutions. Among these are the largest brands, such as Sberbank, VTB, Rosselkhozbank. Their functions are to make key decisions in the banking sector of the Russian Federation, related primarily to lending and servicing major enterprises, budgetary institutions, and international projects.
The largest federal brands may have regional offices that operate in the constituent entities of the Russian Federation and municipalities. In addition, the regions may have their own financial institutions that are not subordinate to federal structures. These organizations perform local functions. A regional bank, whether it is a representative office of a federal brand or an organization created at the level of a subject or municipality, solves problems related, in turn, to lending and servicing enterprises and individuals that work in the corresponding region.
It can be noted that in the constituent entities of the Russian Federation, the Central Bank's units also operate. They solve mainly the problems associated with servicing financial transactions of private banks, monitor the activities of local financial organizations.
The principles of the banking system
Having examined the essence and elements of the banking system, we can explore the basic principles of its functioning. Experts determine their specific list. So, there are principles:
- legal;
- institutional;
- functional.
We study their features in more detail.
Legal principles of banking systems
The main principles of the appropriate type include:
- standardization of financial transactions;
- secrecy of deposits and transactions;
- protection of deposits and payments.
The standardization of operations carried out by banks is based on regulatory regulation of the activities of financial institutions. Its main subject is, as we already know, the country's national bank. He develops standards and rules in accordance with which federal and regional private structures should carry out operations.
Secrecy of deposits and financial transactions is the most important principle through which the institutions of the financial system function. A client of a credit institution should have the right to ensure confidentiality of information about himself, as well as about his deposits and other transactions, for example, formed in the process of servicing a corporate current account.
The principle of bank secrecy is established at the level of official legal norms. In this case, we are talking about sources of law that have the highest legal force. In Russia, these are federal laws. So, the principle in question is enshrined in the Federal Law No. 395-1, adopted on December 2, 1990. The jurisdiction of this law includes not only the elements of banking systems under consideration, but also other entities operating in the financial sector. For example, the Deposit Insurance Agency, various audit structures.
Another most important legal principle of the functioning of the banking system is the protection of deposits and payments of clients of financial institutions. A person or organization using the services provided, for example, by one or another regional bank, must be sure that their money in the form of a deposit or payment will be protected from unauthorized access. The way banks are required to ensure compliance with this criterion is also governed by federal law.
In addition, the central bank of the state can issue normative acts in addition to federal sources, monitor the activities of credit organizations in terms of ensuring the safety of deposits and transactions. This aspect of the functioning of banks is among the significant competitive advantages in the market. The client will prefer to contact the credit institution that can ensure the security of financial transactions.
The main method of protecting deposits and payments in banks is customer identification. There are a large number of technologies through which it can be implemented. Due to the active development of online transactions, this aspect of the relationship between customers and banks, the national bank of the state can pay special attention both from the point of view of monitoring the activities of private financial institutions, and in the aspect of regulating the work of relevant organizations.
Institutional Principles of Banking Systems
The next group of principles for the functioning of banking systems is institutional. These include:
- two-level organization of management of the credit and financial system of the state;
- centralization of management of the country's banking institutions.
The first principle is fixed, like many others, that ensure the functioning of the financial system of Russia, at the level of federal law. It involves the classification of banks of the Russian Federation into 2 levels: regulatory and functional.
At the first institutional level of the financial system, the Central Bank and its subordinate regional structures are located. Its task, as we have already explained above, is to carry out normative regulation of the activities of other credit institutions operating in the country. The latter, in turn, are located on the second level. In practice, they implement the basic functions specific to banks: lending and servicing the population and enterprises. Actually, we also actually considered this aspect above, outlining how elements of banking systems can be classified.
It is worth noting that the Central Bank of the Russian Federation also solves important functional tasks. True, their essence in many cases is quite far from those that characterize the activities of credit organizations at the second level. So, the Central Bank of the Russian Federation credits private banks, refinances them if necessary, registers federal, regional banks, issues licenses to them. Commercial enterprises are not involved in these types of activities. The exclusive competence of the Central Bank of the Russian Federation also lies in solving a number of tasks that are not directly related to the functioning of the banking system. Among them: inflation regulation, emission, currency policy. These competencies of the Central Bank of the Russian Federation already refer, in fact, to the functional principles of banking systems. Consider their features.
The functional principles of banking systems
Among the key principles in question in relation to the banking system of Russia:
- monopoly right of the Central Bank of the Russian Federation to issue cash;
- the exclusivity of the credit and financial activities of organizations subordinate to the Central Bank of the Russian Federation.
Thus, due to the fact that only the Central Bank of the Russian Federation has the authority to provide the state economy with money, the legitimacy and stability of the banking system are guaranteed. This is also facilitated by the fact that banking institutions operating in Russia are exclusively engaged in profile activities, and work only under the laws that regulate financial and credit operations. The functioning of banks is carried out through the use of resources of a special infrastructure. Consider its specifics.
What is the specificity of banking infrastructure?
Banking infrastructure is a set of legal norms adopted by the authorities of the state, social institutions that ensure the functioning of credit and financial institutions, as well as technological resources, through which various financial transactions are carried out.
The first elements include legal norms regulating the activities of the Central Bank and private banking organizations, administrative norms formed within the jurisdiction of individual financial institutions, and local standards adopted by specific financial structures at the level of departments and offices.
Key social institutions that support the work of the banking system of the state can be represented:
- authorities governing business processes at various levels;
- educational institutions and personnel services, which are responsible for the training of competent specialists in banking operations;
- research and expert organizations involved in the study and optimization of various business processes at the level of the country's banking system.
The technological resources that form the financial infrastructure can be represented by a wide range of solutions:
- computers and software designed to process banking operations;
- communication lines;
- fixed assets of banks - buildings, structures, vehicles.
All the subjects of the financial system of the state are interested in ensuring that the banking infrastructure is effective - in fact, the authorities, the Central Bank, and private credit institutions. The extent to which it is stable, functional and technological, in many respects determines the level of economic development of the country, the stability of partnerships established between various business entities. The banking system is of great importance to the state. We will study this aspect in more detail.
The importance of the banking system for the state
So, we examined the basic structural elements of the banking system of the state, the specifics of the corresponding infrastructure and the activities of the main subjects of financial legal relations at various levels. What is the significance of this system for a country?
Banks, represented at various levels, from the Central Bank to local credit and financial organizations, ensure the functioning of most of the business relations in the state. Bank status has a limited number of financial institutions. Only those organizations that meet the criteria and requirements established by law receive it. It is assumed that the credit institution will be able to issue loans, accept deposits and provide their protection, make payments initiated by individuals and legal entities.
The banking system is among the key elements of the country's economy. The more stable it is, the more successfully the economy of the state will develop. The interaction of the elements of the banking system established by the competent authorities, therefore, involves the participation of citizens, enterprises, budgetary structures, and foreign entities.
Financial legal relations are carried out in the economy almost constantly. A person paying for a purchase in a store uses the products of the banking system — cash, issued by the Central Bank, or a plastic card, which, firstly, is issued by a private credit and financial institution that operates in accordance with the norms of the law and orders of the Central Bank of the Russian Federation, and secondly, it uses the acquiring infrastructure, which is managed by the same bank or partner organization. Sellers in this store pay for the supply of goods from counterparties through a bank account, as well as through it make other payments in the form of salaries, social contributions, various taxes.
Thus, the elements of the modern banking system are constantly interacting with each other. Their functioning is regulated at the level of official sources of law, local sources. Elements of the credit and banking system work with the involvement of a special infrastructure, which is represented by a wide range of components. The state should be interested in the quality of the former. This means that it is in the interests of the authorities to ensure the successful development of the necessary infrastructure components of the financial system. Of course, in this case we can also talk about involving private structures in this process.
Summary
So, we studied the key elements of banking systems, examined their main functions, as well as the specifics of the infrastructure that they use. – . , , , – . , , , .