Legal Status and Functions of Bank of Russia

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advtanmoy
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Article 75 of the Constitution of the Russian Federation establishes the special legal status of the Central Bank of the Russian Federation, gives it the exclusive right to issue currency (Part 1) and to protect the ruble and ensure its stability, which is its main function (Part 2). The status, goals, functions and powers of the Bank of Russia are defined by Federal Law No. 86-FZ, dated 10 July 2002, ‘On the Central Bank of the Russian Federation (Bank of Russia)’ and by other federal laws.

According to Article 3 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, the goals of the Bank of Russia are: to protect the ruble and ensure its stability; to develop and strengthen the banking system of the Russian Federation, to ensure stability of and develop the national payment system, and to develop the financial market  of the Russian Federation and ensure its stability.

Bank of Russia performs the following functions:

  • in collaboration with the Government of the Russian Federation, it elaborates and pursues a single state monetary policy;
  • in collaboration with the Government of the Russian Federation, it elaborates and pursues a policy of developing and ensuring the stable functioning of the financial market of the Russian Federation;
  • it is the sole issuer of cash money and organiser of cash turnover;
  • it approves the graphic representation of the ruble as the currency sign;
  • it is the last-resort creditor for credit institutions, and it organises the system to refinance them;
  • it sets the rules to effect settlements in the Russian Federation;
  • it exercises supervision and oversight over the national payment system;
  • it sets the rules for conducting banking operations;
  • it effectively manages the international reserves of the Bank of Russia;
  • it adopts decisions on the state registration of credit institutions, it issues banking licences to credit institutions, suspends and revokes them;
  • it adopts decisions on the state registration of non-governmental pension funds;
  • it exercises supervision over the activities of credit institutions and banking groups;
  • it exercises regulation, control and supervision over the activities of non‑bank financial institutions in compliance with federal laws;
  • it exercises regulation, control and supervision over professional services provided in the financial market in compliance with federal laws;
  • it registers the issues of issue-grade securities, securities prospectuses and reports on the results of the issuance of issue-grade securities;
  • it exercises control and supervision over compliance by issuers with the laws of the Russian Federation on joint-stock companies and securities;
  • it exercises regulation, control and supervision in the area of corporate relations in joint-stock companies;
  • it conducts, on its own behalf or on behalf of the Government of the Russian Federation, all kinds of banking operations and other transactions necessary for the performance by the Bank of Russia of its functions;
  • it organises and exercises foreign exchange regulation and foreign exchange control pursuant to the legislation of the Russian Federation;
  • it sets the procedure for effecting settlements with international organisations, foreign states, legal entities and individuals;
  • it approves industry accounting standards for the Bank of Russia, credit institutions, non-bank financial institutions, credit history bureaus and credit rating agencies, the chart of accounts for the accounting of the Bank of Russia and the procedure for using the chart, the charts of accounts for the accounting of credit institutions, non-bank financial institutions, credit history bureaus and credit rating agencies and the procedure for using the charts;
  • it sets and publishes the official exchange rates of foreign currencies against the ruble;
  • it takes part in preparing a forecast of the Russian Federation balance of payments;
  • it takes part in the development of a methodology for compiling the Russian Federation financial account in the system of national accounts and organises the compilation of the Russian Federation financial account;
  • it compiles the balance of payments of the Russian Federation, international investment position of the Russian Federation, statistics on external trade of the Russian Federation in services, external debt of the Russian Federation, the international reserves of the Russian Federation, direct investment in the Russian Federation and direct investment of the Russian Federation abroad;
  • in order to compile the balance of payments of the Russian Federation, the international investment position of the Russian Federation, statistics on external trade of the Russian Federation in services, external debt of the Russian Federation, the international reserves of the Russian Federation, direct investment in the Russian Federation and direct investment of the Russian Federation abroad, it develops on its own and approves a statistical methodology, a list of respondents, the forms of federal statistical observation, the procedure and forms for the respondents to compile and submit primary statistical data according to these forms;
  • it analyses and forecasts the state of the Russian economy and publishes relevant materials and statistics;
  • it effects Bank of Russia payments on household deposits with bankrupt banks not covered by the mandatory deposit insurance system in the cases and according to the procedure stipulated by the federal law;
  • it is the depository of the IMF ruble-denominated funds and it conducts operations and transactions stipulated by the IMF Articles of Agreement and the agreements concluded with the IMF;
  • it exercises control over compliance with the laws of the Russian Federation on countering the illegal use of insider information and market manipulation;
  • it protects the rights and legitimate interests of shareholders and investors in financial markets, insurance policyholders, insured persons and beneficiaries acknowledged as such pursuant to insurance legislation, and also insured persons under compulsory pension insurance, non-governmental pension fund depositors and participants under non-governmental pension plans;
  • it organises the provision of the services to transmit electronic messages on financial operations;
  • in collaboration with the Government of the Russian Federation, it implements measures aimed at improving financial literacy among individuals and small and medium-sized enterprises of the Russian Federation;
  • in collaboration with the Government of the Russian Federation, it develops and implements a policy of improving financial inclusion for individuals and small and medium-sized enterprises of the Russian Federation;
  • it assesses the size (level) of risk of suspicious transactions that might be conducted by credit institutions, credit institutions’ clients — legal entities (other than credit institutions, state and municipal authorities) (individual entrepreneurs) registered in accordance with Russian laws;
  • it fulfils other functions in compliance with federal laws.

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