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Banking services in Russia: theory and facts.

The economic situation in Russia, due to the historic and unprecedented on-going changes in this country, is one of the most in­teresting fields of analysis and research. I have chosen the banking system for the topic of my essay as it is one of the most important instruments of the economy. While studying materials on the banking system in Russia I came across many deviations from the well-established standards of the banking system in Europe and some facts showing that in real life banks in Russia does not follow the laws and regulations. In my research I have tried to answer two questions.

Is the banking system in Russia fully developed?

Banking services in Russia: theory and fact. Do they differ?

In order to answer the first question I compared the European banking system and the current banking system in Russia as it is regulated by laws and by governmental acts and decisions.

Banks are the most important link in the world of money. This is be­cause, first of all, banks nowadays perform the main part of the work of transfer­ring money from a customer to a seller, by operating the system of payments in the economy. Almost everyone in the world uses or has used banking services. Families keep their savings there, and banks pay them interest rates on their deposits and give them loans to buy expensive goods. Companies conduct payments through them.

As we can see, everything in the economy is controlled by money and banks are a tool-kit for the economy - controlling the money-circulation between firms, depositors and loaners, and offering service; to make that circulation easier for them. Banking services also have a productive nature. Even such a simple

operation as the admission of money on deposits from people and companies in­volves a hug-productive force. A bank does not just collect money - it converts net­working, unused money resources, to working assets. This is also true; of credits given to companies and firms for the development of their productive and financial activity. A healthy and stable economy of our country depends on healthy banking services. Now we will see if the banking system in Russia and, in particular, in my home city o: Chelyabinsk gives any chances for our economy to develop.

All banking services can be divided into specific and ~ nonspe­cific services. Specific services include: 1) deposit operations; 2) credit op­erations; 3) payment operations.

Deposit operations are the operations of placing clients' money into the bank on deposit. While keeping money for its clients, the bank pays them in­terest.

Payment operations by banks can be fulfilled in cash or in transfer pay­ments. Banks can open different account numbers for their clients and can fulfill their payment orders related to buying on selling goods, paying wages, transfer­ring tax payments and making all other important payments. In issuing payments the bank is acting as an intermediary between sellers and buyers, companies, tax agencies, citizens, and the budget.

These three types of bank operations are commonly called traditional bank operations. The term 'traditional' is applied because all of these operations to­gether establish what we call a bank.

Cash operations can also be regarded as traditional operations. They are the operations of giving out cash money to the clients from their accounts and cash exchanging cash currency. According to the law, these operations have not been included in the basic operations that form up a bank, but in their meaning they reflect the essence of the bank system. It is difficult to imagine a bank that has deposits, gives loans and conducts payments, but does not have cash opera­tions.

Additional operations can be placed between traditional and nontraditional operations. They include currency operations, and operations with securities - with gold, precious metals and ingots. A bank does not have to in­clude these operations in its activities. In 1994 the majority of banks did not have a currency license, and eve-nowadays in our city banks are not allowed to make operations with gold, precious metals and ingots, yet they have not lost the right to be called banks.

A bank can decide which services will be paid for and which not, but until now every single activity of the bank has been paid for by clients and all services have been divided into very expensive and inexpensive services. I think that this is due to the fact that in the new Russia it was easy to make money and everyone wanted to do it as quickly as possible. Companies, therefore, had nowhere else to go and they had to pay extremely high interest rates and charges for services. Nowadays everything is changing because of increased competi­tion between banks and some of them are trying to attract new clients by lowering the charges for their services.

Vocabulary;

Due-обязана

Deviations-отклонения

Compared-сравнивать

Current-распространенную

Perform-выполняют

Payments-платежи

Rates-ставка

Conduct-вести

Loans-заемы

Admission-вход, допущение

Involves-вовлекать