Banks/Banking in Russia
The system of banking in Russia has developed into a two-tier system. This includes a central bank as well as commercial banks. The RCB, the Russian Central bank operates under the regulation of Russian laws 1990 that made banks to assist favored enterprises. The 1993 constitution gave more autonomy.
The commercial banks in Russia by 1995 end are nearly 3000, but majority of them are small with little capitalization. In fact, many are financially connected to companies and act as conduits of subsidized credits exclusively to these enterprises.
The system of commercial banking in Russia involves viable banks attained financial credibility and experts remain operating under all economic conditions. In 1991, Agroprombank was renamed as Rossel’bank, the Zhilsotsbank and Promstroybank into Mosbusinessbank.
But, all these became independent commercial operations and were reorganized as joint-stock companies forming the commercial banking system.
The quality and types of services offered by the banks in Russia are rudimentary as per the western industrialized standards. They are incapable of offering efficient and diverse customer services as the Soviet Union has no tradition of retail banking and lacks sophisticated infrastructure, particularly trained staffs and telecommunications with high-speed.
The top banks in Russia are seven and are bundled in holding companies known as Financial Industrial Groups. The elite banks as well as the FIGs are the main financial players are also termed clans and they dominate the Russian politics. These are considered to be the Big 7 leading banks in Russia owing to their political connections, financial capital and media holdings. The main banks are Alfa, LogoVAZ, Inkombank, Most, Menatep, SBS- Agro and Oneximbank.
The Alfa group has signature companies and key holdings. Earlier a trading company later thrived on activities relating to foreign trade and economic relations. Alfa reaped good profits and handles state customs committee funds. Inkombank is an authorized bank with 68 regional branches. LogoVAZ is involved with various businesses and is a part of this group banking.
Menatep serves as authorized bank, while the Most is now the authorized bank for Moscow City, particularly for real estate finance. Oneximbank is a powerful bank and SBS-Agro is active in South European Russia and focuses on Russia regions retail banking.