The tasks and functions of the Bank of Russia are set by the Constitution of the Russian Federation and Federal Law on the Central Bank of the Russian Federation (Bank of Russia). The Bank of Russia’s main objective is to protect the rouble and ensure its stability. The Bank of Russia is also the sole issuing centre and the body of banking regulation and supervision. Its main functions are formulated in Article 4 of the Federal Law on the Central Bank:
- in collaboration with the government of the Russian Federation, it elaborates and implements a uniform national monetary policy designed to protect the rouble and ensure its stability;
- it is the only issuer of cash and the organiser of its circulation;
- it is the creditor of last resort for credit organisations and organises the refinancing system;
- it sets the settlement rules of the Russian Federation;
- it sets the rules of conducting banking operations and accounting and the reporting rules for the banking system;
- it conducts state registration of credit organisations and issues and revokes the licences of credit organisations and the organisations that audit them;
- it supervises the activities of credit organisations;
- it registers the issue of securities by credit organisations in accordance with federal laws;
- it conducts, on its own behalf or on behalf of the government of the Russian Federation, all kinds of banking operations necessary for the Central Bank’s implementation of its main duties;
- it conducts foreign exchange regulation, including operations to buy and sell foreign exchange, and establishes the procedure for effecting settlements with foreign countries;
- it organises and exercises foreign exchange control on its own and through authorised banks in accordance with the laws of the Russian Federation;
- it participates in making Russian Federation balance of payments forecasts and organises the drafting of the Russian Federation’s balance of payments;
- it analyses and forecasts the state of the Russian Federation’s economy as a whole and by region, concerning specifically monetary, credit, foreign exchange, financial and price relations, publishes the corresponding materials and statistical data and performs other functions in accordance with federal laws.
The Bank of Russia co-ordinates and regulates settlement relations in Russia and establishes the rules, forms, deadlines and standards for non-cash settlements obligatory for all legal entities and natural persons. The forms of non-cash settlements are determined by the Civil Code of the Russian Federation.
The principal forms of non-cash settlements today are payment orders and, to a lesser extent, payment requests (for collection). Letters of credit and cheques are used on a small scale.
A part of settlements is effected by legal entities and private individuals using payment cards, which are gaining ever wider acceptance.
The Bank of Russia is making efforts to ensure the effective and uninterrupted functioning of the settlements system and enhance its reliability.
Non-cash settlements are effectuated through correspondent accounts opened with the Bank of Russia, correspondent accounts opened by credit institutions with one another, correspondent accounts opened with non-bank settlement credit institutions and through the system ofintrabank settlements, using inter-branch settlement accounts.
Russian legislation accords the Bank of Russia a special place in the country's payments system. The Bank of Russia not only ensures general guidance of the payments system and provides the methodology and organisation of settlements, but also directly participates in this system, effecting interbank settlements through its divisions.
The payments made through the Bank of Russia settlement network account for a large part of the payments turnover.
Every participant in the settlements effected through the Bank of Russia settlement network is awarded an identification code. The Bank of Russia keeps the Russian Federation Bank Identification Code Directory (BIC Directory), which contains the following data: the name of each credit institution participating in settlements and its bank identification code, correspondent account with the Bank of Russia and domicile.
The BIC Directory is regularly reviewed and updated.
The credit institutions located in the Russian Federation (resident credit institutions) and having the banking licence of the Central Bank of the Russian Federation open only one correspondent account with one of the Bank of Russia institutions (a cash settlement centre or operations department), which services them. The branches of credit institutions may have correspondent subaccounts to implement settlements and may not have such accounts. If they don't, they effect settlements through the correspondent account of their parent organisation or the subaccount of another branch.