Banking systems
Most market economies have a two-tier structure, which implies both horizontal and vertical interconnections between banks.
The need for a two-tier banking system is due to the contradictory nature of market relations. On one hand, they require the freedom of entrepreneurship and disposal of funds, and this is ensured by the elements of the lower level – commercial banks. On the other hand, these relations need a certain regulation, control and purposeful influence that requires a special institution in the form of a central bank.
The creation of central banks with the function of regulating monetary relations has made it possible to effectively curb the elements of the market while while preserving the freedom of private enterprise.
The structure of the banking system boils down to the distribution of all
banking and credit institutions in a hierarchical order. It has
The Russian banking system includes a central element and lower functional bodies.
A bank is a credit institution, which has the exclusive right
to collectively perform the following banking operations: attraction of deposits from individuals and legal entities, placement of these funds on its own behalf and at its own expense on a payback, payment and maturity basis, and opening and maintaining bank accounts of individuals and legal entities.
At the lowest level of the banking hierarchy are commercial and
At the lowest level of the banking hierarchy are commercial and specialized banks. They are engaged in the accumulation of free
money resources in the form of deposits, running current accounts and all kinds of settlements between relevant economic entities that are their clients.
A credit institution is a legal entity that, in order to derive
a credit institution – a legal entity that has the right to carry out banking operations as the main objective of its activities on the basis of a special permit (license) from the Bank.
The structure of the banking system is also subdivided into sectors, which include institutions similar in function. For example, consumer credit banks, land banks, the sector of leasing institutions and others. The main purpose of this division is to establish regulatory procedures, depending on the specifics of operations of institutions of a particular sector.
All banking structures can also be represented by
The following varieties:
- private banks;
- banks with state participation;
- Banks with foreign capital.
Non-bank credit institutions can be divided into:
- non-bank credit and depository institutions;
- Settlement non-bank credit institutions;
- Non-bank credit institutions of cash collection.
A non-bank credit institution is a credit institution,
a credit organization that has the right to engage in certain banking operations.
A representative office of a credit organization is its an economically autonomous subdivision located outside the place of location of a credit organization location of a credit organization, which represents its interests and protects them protecting its interests. A representative office of a credit organization has no right to carry out banking operations.