General Overview
According to the International Monetary Fund (IMF), the payment system in Russia has improved substantially over the past ten years: the majority of non-cash payments are now made electronically, payment delays have been much reduced, private sector initiatives have been encouraged, and a regulatory framework has been put in place. The Central Bank of the Russian Federation (CBR) has made substantial progress in developing a legal framework within which the payment systems, central bank and private sector, can operate. A substantial body of regulations has already been developed and Federal laws relating to funds transfers and electronic documents are now in the pipeline. (IMF 2003, p. 16, 43)
The assessment of the Core Principles of Systematically Important Payment Systems indicated that the system is not in itself a major source of systematic risk. However, the picture is still one of a fragmented set of components rather than of a single unified system and there are efficiency shortcomings. The CBR's inability to deliver a nationwide real-time same-day settlement service is impeding the development of the CBR's monetary and market operations; and the highly decentralized correspondent account framework creates liquidity management difficulties for the banks. (IMF 2003, p. 16)
During the Financial Sector Stability Assessment in 2003 the IMF recommended that the CBR adopt a revised draft concept paper on payment system reforms and initiate the development of a national real-time gross settlement (RTGS) system. (IMF 2003, p. 16)
The need to redevelop the CBR payment system into an RTGS system appears to be accepted in principle within the CBR. A new concept paper on the reform of the CBR payment system (including development of RTGS) is now being prepared within the CBR. Many of the actions points recommended by the IMF are covered in this concept paper, and CBR's vision of a new CBR payment system infrastructure. (IMF 2003, p. 43)
In June 2004 the CBR and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) signed a Memorandum of Understanding (MoU) in which the CBR agreed to use SWIFTNet for its planned new RTGS system. The proposed system will link 10 separate proprietary regional payment systems that exist in the Russian Federation. The new system will centralize all intra-regional settlement, which means adding a layer over the existing regional settlement systems. This sets a foundation for payment system harmonization, improved risk monitoring and improved liquidity management at the Central Bank level. (SWIFT 2004)
The Bank of International Settlements notes that the payment system of the CBR and the private payment systems are governed by the Civil Code of the Russian Federation, by federal laws "On the Central Bank of the Russian Federation" and "On banks and banking activity", by other federal laws, and by regulations of the CBR. The federal law "On the Central Bank of the Russian Federation" establishes the authority of the CBR in the area of payments. The above-mentioned legislative acts do not establish rules on the functioning of Russian payment systems and responsibilities of their participants. Rules on conducting operations in different payment systems are defined by regulations of the CBR, while the responsibilities of the payment system participants are regulated by agreements between the participants and the payment system operators. (BIS 2003, p. 1)
The CBR constantly pays special attention to the upgrading of the regulatory framework ensuring the functioning of the Russian payment system. The CBR informs the banking community and the public about the amendments and changes made to its rules and regulations and the decisions on technical modifications in the Russian payment system. (CBR 2003)
According to the law "On the Central Bank of the Russian Federation (Bank of Russia)", one of the main aims of the CBR's activity is to ensure the effective and smooth functioning of the payment system. To that end, the CBR performs coordination, regulation and licensing the organization of payment and settlement systems, including clearing systems, in the Russian Federation. The CBR establishes rules, forms, timing and standards for effecting non-cash settlements, monitors the activities of private payment systems on the basis of statistical reports and carries out settlements through its branches. (BIS 2003, p. 4)
As an operator of its own payment system, the CBR co-ordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, setting guidelines for their functioning, and establishes non-cash settlement rules, forms, terms and standards, as well as organizes cash circulation. In addition, it establishes the procedure for compiling and presenting statistical reports characterizing the Russian payment system in order to make it more transparent. (CBR 2003)
At present the Russian payment system can be said to consist of two relatively independent segments, formed by the payment system of the CBR and private payment systems. The Bank of Russia plays a special role in the country's payment system. It is not only an operator and user of its own payment system, but also defines key rules for the functioning of the private payment systems. (BIS 2003, p. 1)
The CBR payment system (to which all credit organizations have to belong) is a distributed gross settlement system, made up of 78 regional systems. Of these, 59 use centralized payment processing with the remaining 20 having a number of separate processing sites. Most of the centralized regional systems provide continuous, item-by-item, processing of payments; the remainder provide designated time settlements. In the Moscow region, both methods of settlement are available. In all of the decentralized regional systems, batches of intraregional payments are transferred at designated times. All electronic payments and the vast majority of paper-based payments passing through the CBR system and credit transfers. Paper-based payments still make up a sizable but rapidly falling proportion of total payments processed (dropping from 25 percent in 1999 to 7 percent in 2002). Each regional system offers an intra-regional and an inter-regional service. Intra-regional transactions dominate: over 90 percent by volume, 85 percent by value. Electronic inter-regional payments instructions are routed between the 78 regional head offices via the CBR's Inter-regional Informatization Center, with settlement between the regional head offices on a bilateral basis. (IMF 2003, pp. 41-42)
The private payment system includes the following settlement systems of credit institutions: (1) the intrabank settlement systems; (2) the systems of settlements through correspondent accounts opened by credit institutions with one another; (3) the systems of settlements through non-bank clearing institutions. (CBR 2003)
Intrabank payment networks are dominated by Sberbank's payment system. The latter has the following components: the System of Interbranch Settlements (SIBS), which links its 1,500 branches and enables the customers of those branches to send non-cash payments to each other; bilateral correspondent payment links with other commercial banks; settlement agent function for Europay International payment card transactions; and the payment card settlement. There is a substantial volume and value of Sberbank customer payments which have to be settled across the CBR payment system; Sberbank therefore needs to have some CBR correspondent accounts to effect such payments. It is evident that many banks have a correspondent relationship with Sberbank and use its network to make funds transfers, as an alternative to the CBR system. (IMF 2003, p. 42)
As of July 2002, there were 41 private sector non-bank clearing organizations (NBCOs), settling on a gross basis. All are licensed and regulated by the CBR. The market participants on Moscow Interbank Currency Exchange and Russian Trading System (the two securities trading systems) make up the membership of the special-purpose NBCOs created to settle the cash legs of securities trades. The bulk of NBCO payments by value and volume is accounted for by these securities market settlement vehicles. Bilateral correspondent payment arrangements, established between pairs of banks, and often using the SWIFT communication network and standards, have become more important in recent years. (IMF 2003, pp. 42-43)
The Central Bank of Russia not surprisingly dominates the payment system environment. The statistics suggest that the CBR payment system processes around two thirds by value (half by volume) of all non-cash transactions (including transactions of intrabank networks, notably Sberbank). (IMF 2003, p. 41)
Electronic payments accounted for 72.3% of the total number of payments and 84.0% of the total value of payments effected through the Russian payment system, while payments made using paper documents accounted for 27.7% and 16.0% respectively. Electronic payments predominate in interbank settlements, whereas paper documents still account for a large portion of settlements effected between clients of one subdivision of a credit institution, because the speed with which such payments are effected meets the clients' requirements. (CBR 2003)
The Principles
I. The system should have a well-founded legal basis under all relevant jurisdictions. |
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The International Monetary Fund (IMF) notes that the Central Bank of the Russian Federation (CBR) has made substantial progress in developing a legal framework within which the payment systems, central bank and private, can operate. A substantial body of regulations has already been developed, and Federal laws relating to funds transfers and electronic documents are now in the pipeline. In addition, a concept paper on the reform of the CBR payment system (including development of real-time gross settlement (RTGS) system) is now being prepared within the CBR. (IMF 2003, p. 43)
During the Financial Sector Stability Assessment in 2003 the IMF recommended the following action: (1) the implementation of Federal laws on electronic documents and funds transfers should be speedily concluded; (2) the RTGS project needs to address a range of legal issues, which should be flagged in the concept paper. (IMF 2003, p. 45)
The Russian payment system is regulated by the Civil Code of the Russian Federation and several federal laws, the most important of them being the Federal Law on the Central Bank of the Russian Federation and Federal Law on Banks and Banking Activities, and the CBR rules and regulations issued in pursuance of these laws. The relationship between the CBR and its clients and between credit institutions and their clients are regulated by correspondent account (subaccount) or bank account agreements. These documents provide a legal basis for the functioning and further development of the Russian payment system. The CBR informs the banking community and the public about the amendments and changes made to its rules and regulations and the decisions on technical modifications in the Russian payment system. (CBR 2003)
II. The system's rules and procedures should enable participants to have a clear understanding of the system’s impact on each of the financial risks they incur through participation in it. |
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According to the International Monetary Fund (IMF), the Central Bank of Russia (CBR) has sole regulatory responsibility for payment systems and for non-cash settlements generally. The Department of Payment Systems and Settlements is responsible for payment system oversight. As regards the CBR payment system, the principal oversight tool is the framework of CBR regulations that has been developed to govern the system's (and its regional components') operating procedures. As regards private payment systems and networks, there are also CBR regulations that lay down certain operating principles. But in addition, and because only licensed credit organizations can provide funds transfer services, private systems/networks fall within the ambit of the banking supervisors. (IMF 2003, p. 66)
In addition, the responsibilities of the payment system participants are regulated by agreements between the participants and the payment system operators. (BIS 2003, p. 2)
A concept paper on the reform of the CBR payment system (including development of real-time gross settlement (RTGS) system) is now being prepared within the CBR. During the Financial Sector Stability Assessment in 2003 the IMF recommended that for the future RTGS, the CBR should consider a separation of the operating rules and procedures from the formal regulations. (IMF 2003, pp. 43, 45)
III. The system should have clearly defined procedures for the management of credit risks and liquidity risks, which specify the respective responsibilities of the system operator and the participants and which provide appropriate incentives to manage and contain those risks. |
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Highly decentralized correspondent account framework creates liquidity management difficulties for the banks in Russia. (BIS 2003)
However, the Central Bank of the Russian Federation (CBR) prepares a concept paper on the reform the Russian payment systems, including development of a real-time gross settlement (RTGS). During the Financial Sector Stability Assessment in 2003 the International Monetary Fund (IMF) recommended that the CBR design the future RTGS with appropriate liquidity risk management capability (intraday liquidity, queue management, differential tariffs, throughput rules or guidelines). (IMF 2003, pp. 43, 45)
In June 2004 the Central Bank of Russia (CBR) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) signed a Memorandum of Understanding (MoU) in which the CBR agreed to use SWIFTNet for its planned RTGS system. The new system will centralize all intra-regional settlement, which means adding a layer over the existing regional settlement systems. This sets a foundation for payment system harmonization, improved risk monitoring and improved liquidity management at the Central Bank level. (SWIFT 2004)
Credit institutions and their branches prefer to effect settlements through the Bank of Russia payment system because it is reliable and do not involve credit risk. A constantly high level of payments effected through the Bank of Russia payment system is attributable to its efficient and uninterrupted functioning and the fact that the use of risk-free funds in Bank of Russia accounts in settlements between credit institutions minimizes the latter's financial risk. (CBR 2003)
In addition, credit organizations deposit part of their funds as required reserves with the branches of the CBR, on separate accounts. In some cases, stipulated by regulatory acts of the Bank of Russia, these reserve deposits may be used by the credit organization as short-term liquidity, provided that the average balance of reserves is maintained at the required level. (BIS 2003, p. 5)
Intraday credit can be extended by the CBR to banks in two regions currently (Moscow and St.Petersburg); the facility is being extended to other regions. Correspondent account balances are very high. In particular circumstances as laid down by the CBR, banks may be allowed to reduce their required reserves requirement for intra-month liquidity management purposes. (IMF 2003, p. 42)
If credits granted out of the reserves (funds) are not repaid on time, repayment is effected in accordance with the principle of joint and several responsibility of the settlement participants, i.e. proportionately by all participants, in accordance with the agreement on the establishment and utilization of funds (reserves). Hence the settlement non-bank credit organizations (NBCO) is not exposed to credit risk. Rules for conducting settlements on a net basis are agreed upon by settlement NBCO with the CBR. (BIS 2003, p. 16)
IV. The system should provide prompt final settlement on the day of value, preferably during the day and at a minimum at the end of the day. (Systems should seek to exceed the minima included in this Core Principle.) |
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The Bank of International Settlements reports that according to Article 80 of the federal law "On the Central Bank of the Russian Federation (CBR)", the total term for execution of cashless payments must not exceed two working days for intraregional payments, and five operational days for inter-regional payments. (BIS 2003, p. 1)
The CBR payment system ensures crediting clients' accounts on the day of funds receipt; in some regions, funds are written down from and entered to accounts in a regime approximating a real-time regime, allowing clients to use these funds forthwith. (CBR 2003)
Electronic payments in intra-regional settlements are completed on the same day. Interregional electronic payments are made within one day or no later than the next day, depending on the distance between the time belts of the regions where the payer and payee are located. (CBR 2003)
The CBR prepares a concept paper on the reform the Russian payment systems, including development of a real-time gross settlement (RTGS). During the Financial Sector Stability Assessment in 2003 the IMF recommended that the RTGS service should incorporate clear and coordinated time-tabling for the intraday, real-time, settlement of payments between all regions and across all times zones. (IMF 2003, pp. 43, 45)
V. A system in which multilateral netting takes place should, at a minimum, be capable of ensuring the timely completion of daily settlements in the event of an inability to settle by the participant with the largest single settlement obligation. (Systems should seek to exceed the minima included in this Core Principle.) |
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The Central Bank of the Russian Federation (CBR) reports that in 59 out of the total 78 regional branches of the CBR settlements are effected by the centralized method and in 19 by the decentralized method. The centralized regional branches conduct the continuous processing of payments within one day or on a discrete basis several times during the day. (CBR 2003)
A fund to maintain liquidity of participants in settlements is set up in the systems of settlements through non-bank clearing institutions for the timely completion of multilateral netting. (CBR 2003)
In June 2004 the Central Bank of Russia (CBR) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) signed a Memorandum of Understanding (MoU) in which the CBR agreed to use SWIFTNet for its planned real-time gross settlement (RTGS) system. The system will centralize all intra-regional settlement, which means adding a layer over the existing regional settlement systems. (SWIFT 2004)
VI. Assets used for settlement should preferably be a claim on the central bank; where other assets are used, they should carry little or no credit risk and little or no liquidity risk. |
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According to the Bank for International Settlements, each credit organization located on the territory of the Russian Federation, after receiving a license from the Central Bank of the Russian Federation (CBR), must open a correspondent account with its local branch of the CBR. (BIS 2003, p. 5)
To effect settlements through the Bank of Russia payment system, each credit institution must have a correspondent account opened in the CBR division. A credit institution may open a correspondent subaccount for its branch in the CBR division unless the parent institution or another branch of the credit institution is serviced in the same CBR division. In that case, settlement operations are effected through the correspondent account of the parent institution or the correspondent subaccount of another branch of the credit institution opened in the CBR. (CBR 2003)
VII. The system should ensure a high degree of security and operational reliability and should have contingency arrangements for timely completion of daily processing. |
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To guarantee security and safety of information inside its payment system, the Central Bank of the Russian Federation (CBR) identifies the users, controls the completeness and confirms the authenticity of payment documents, delimits the rights of access to and protects the payment processing systems from unsanctioned access, controls the implementation of settlement operations and confidentiality (cryptographic protection) of payment data and provides backup for software systems and information resources. (CBR 2003)
Credit institutions and their branches prefer to effect settlements through the CBR payment system because it is reliable and uses advanced technologies and information protection methods that ensure the effective and secure provision of services to all settling participants, allow them quickly to exchange information and do not involve credit risk. The processing of the constantly rising number of payments is ensured by the development of information and telecommunications systems. (CBR 2003)
The International Monetary Fund reports that the CBR prepares a concept paper on the reform the Russian payment systems, including development of a real-time gross settlement (RTGS). During the Financial Sector Stability Assessment in 2003 the IMF recommended that the future RTGS should have remote back-up capability (based upon the arrangements now in place in the Moscow region) and a formal business continuity plan that is regularly tested with the participation of the major banks. (IMF 2003, pp. 43, 45)
VIII. The system should provide a means of making payments which is practical for its users and efficient for the economy. |
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According to the International Monetary Fund, the payment system in Russia has improved substantially over the past years: the majority of noncash payments are now made electronically, payment delays have been much reduced, private sector initiatives have been encouraged, and a regulatory framework has been put in place. However, the picture is still one of a fragmented set of components rather than of a single unified system and there are efficiency shortcomings. Nevertheless, the Central Bank of the Russian Federation (CBR) prepares a concept paper on the reform the Russian payment systems, including development of a real-time gross settlement (RTGS). (IMF 2003, p. 16)
The Central Bank of the Russian Federation reports that credit institutions and their branches prefer to effect settlements through the Bank of Russia payment system because it is reliable and uses advanced technologies and information protection methods that ensure the effective and secure provision of services to all settling participants, allow them quickly to exchange information and do not involve credit risk. The processing of the constantly rising number of payments is ensured by the development of information and telecommunications systems. (CBR 2003)
To encourage its clients to use the advanced communications facilities and electronic payments, the CBR set low prices for them. Higher prices are charged for payments effected on paper. In addition, charging the highest prices for services provided at the end of the business day is designed to even out document turnover within one business day, accelerate money turnover and intensify the management of intraday liquidity of credit institutions. At the same time, the Bank of Russia provides free services to clients whose payments do not exceed a certain amount. (CBR 2003)
In addition, the CBR conducts free of charge operations with federal, regional and local budget funds and government extrabudgetary funds, including tax transfers and Federal Treasury operations. (CBR 2003)
Private payment systems demonstrate dynamic growth and focus their efforts on the introduction of advanced techniques of processing settlement documents and the provision of the fullest possible top-quality settlement services with the aim of attracting clients. (CBR 2003)
IX. The system should have objective and publicly disclosed criteria for participation, which permit fair and open access. |
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According to the Bank of International Settlements, the federal law "On banks and banking activity" establishes rules for the registration of credit organizations, including credit organizations with foreign capital, and defines the list of operations that only credit organizations licensed by the Central Bank of the Russian Federation (CBR) can carry out, and the list of other activities which credit organizations may also carry out in accordance with the law. (BIS 2003, p. 1)
The International Monetary Fund reports that the CBR prepares a concept paper on the reform the Russian payment systems, including development of a real-time gross settlement (RTGS). During the Financial Sector Stability Assessment in 2003 the IMF recommended that the CBR decide whether to maintain the existing 100 percent direct participation of all credit institutions in the future RTGS system. If it opts for a two-tier participation, the criteria will need to be clearly described. Exit criteria will also need to be defined. (IMF 2003, pp. 43, 45)
X. The system's governance arrangements should be effective, accountable and transparent. |
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The Central Bank of the Russian Federation (CBR) is accountable to the State Duma of the Federal Assembly. State Duma appoints and discharges the Chairman of the CBR (at the representation of the President of the Russian Federation) and members of the CBR's Board of Directors as well as an auditor to the CBR and approves the CBR's annual report and auditor's report. (CBR website)
The Bank of Russia publishes materials on the state and functioning of the Russian payment system in the press open for the general public (periodicals "Money and Credit" and "Bulletin of Banking Statistics") and in publications for office use (Review of the Russian Payment System). (CBR 2003)
According to the International Monetary Fund, the CBR has also established a procedure for formally consulting the banking sector on technical and policy matters relating to payment systems. It is also involved in more widespread public disclosure of payment systems information, via articles in the press and on its website and through speeches, seminars, etc. The CBR bulletin includes a section containing detailed statistics on the CBR payment system and private payment systems. However, the delineation of institutional responsibilities relating to overlapping issues among the various financial agencies, including payment systems overseers is neither clear nor publicly explained. During the Financial Sector Stability Assessment in 2003 the IMF recommended that the CBR consider how best to delineate internally the responsibilities of, on the one hand, the operators of a more centrally controlled payment system and, on the other, the responsibilities of the oversight department. (IMF 2003, p. 67)
A. The central bank should define clearly its payment system objectives and should disclose publicly its role and major policies with respect to systemically important payment systems. |
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The Bank of International Settlements reports that according to the law "On the Central Bank of the Russian Federation (CBR)," one of the main aims of the CBR's activity is to ensure the effective and smooth functioning of the payment system. To that end, the CBR performs the following functions: it establishes the rules for effecting settlements on the territory of the Russian Federation; it has the exclusive right to issue cash; and it organizes cash circulation. The CBR is also the lender of last resort for credit organizations, providing refinancing facilities for them. (BIS 2003, p. 4)
Concerning matters within its competence, the CBR issues rules that are binding on federal state bodies, state centralized bodies of members of the Russian Federation and local self-governing bodies, and all legal entities and individuals.(BIS 2003, p. 4)
According to the International Monetary Fund, the CBR has sole regulatory responsibility for payment systems and for non-cash settlements generally. The Department of Payment Systems and Settlements is responsible for payment system oversight. As regards the CBR payment system, which has a very decentralized structure, the principal oversight tool is the framework of CBR regulations that has been developed to govern the system's (and its regional components') operating procedures. As regards private payment systems and networks, there are also CBR regulations that lay down certain operating principles. But in addition, and because only licensed credit organizations can provide funds transfer services, private systems/networks fall within the ambit of the banking supervisors. (IMF 2003, p. 66)
The CBR constantly pays special attention to the upgrading of the regulatory framework ensuring the functioning of the Russian payment system. The CBR informs the banking community and the public about the amendments and changes made to its rules and regulations and the decisions on technical modifications in the Russian payment system. (CBR 2003)
As an operator of its own payment system, the CBR co-ordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, setting guidelines for their functioning, and establishes non-cash settlement rules, forms, terms and standards, as well as organizes cash circulation. In addition, it establishes the procedure for compiling and presenting statistical reports characterizing the Russian payment system in order to make it more transparent. (CBR 2003)
Besides publishing all the relevant regulations as required by law, the CBR has also established a procedure for formally consulting the banking sector on technical and policy matters relating to payment systems. It is also involved in more widespread public disclosure of payment systems information, via articles in the press and on its website and through speeches, seminars, etc. The CBR bulletin has included a section containing detailed statistics on the CBR payment system and private payment systems. However, the delineation of institutional responsibilities relating to overlapping issues among the various financial agencies, including payment systems overseers is neither clear nor publicly explained. (IMF 2003, p. 67)
A new concept paper on the reform of the CBR payment system is now being prepared within the CBR. During the Financial Sector Stability Assessment in 2003 the IMF recommended that the CBR submit the payment systems concept paper to a limited period of public consultation once it has been agreed by the CBR Board. (IMF 2003, pp. 43, 46)
B. The central bank should ensure that the systems it operates comply with the Core Principles. |
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As an operator of its own payment system, the CBR co-ordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, setting guidelines for their functioning, and establishes non-cash settlement rules, forms, terms and standards, as well as organizes cash circulation. In addition, it establishes the procedure for compiling and presenting statistical reports characterizing the Russian payment system in order to make it more transparent. (CBR 2003)
The assessment of the Core Principles of Systematically Important Payment Systems indicated that the payment system in Russia is not in itself a major source of systematic risk. However, the inability of the Central Bank of the Russian Federation (CBR) to deliver a nationwide real-time same-day settlement service is impeding the development of the CBR's monetary and market operations; and the highly decentralized correspondent account framework creates liquidity management difficulties for the banks. (IMF 2003, p. 16)
The need to redevelop the CBR payment system into real-time gross settlement (RTGS) system appears to be accepted in principle within the CBR. A new concept paper on the reform of the CBR payment system (including development of RTGS) is now being prepared within the CBR. Many of the actions points recommended by the IMF are covered in this concept paper, and CBR's vision of a new CBR payment system infrastructure. (IMF 2003, p. 16)
The CBR has sole regulatory responsibility for payment systems and for non-cash settlements generally. The Department of Payment Systems and Settlements is responsible for payment system oversight. As regards the CBR payment system, which has a very decentralized structure, the principal oversight tool is the framework of CBR regulations that has been developed to govern the system's (and its regional components') operating procedures. As regards private payment systems and networks, there are also CBR regulations that lay down certain operating principles. But in addition, and because only licensed credit organizations can provide funds transfer services, private systems/networks fall within the ambit of the banking supervisors. (IMF 2003, p. 66)
C. The central bank should oversee compliance with the Core Principles by systems it does not operate and it should have the ability to carry out this oversight. |
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According to the Bank of International Settlement, the Russian payment system consists of two relatively independent segments, formed by the payment system of the Central Bank of the Russian Federation (CBR) and private payment systems. The CBR plays a special role in the country's payment system. It is not only an operator and user of its own payment system, but also defines key rules for the functioning of the private payment systems. (BIS 2003, p. 1)
The Department of Payment Systems and Settlements within the CBR is responsible for payment system oversight. As regards private payment systems and networks, there are CBR regulations that lay down certain operating principles. But in addition, and because only licensed credit organizations can provide funds transfer services, private systems/networks fall within the ambit of the banking supervisors. (IMF 2003, p. 6)
The CBR monitors the activities of private payment systems on the basis of statistical reports. Special attention is given to measures aimed at improving the regulation of private payment systems operating in the country that provide intrabank settlements, settlements on the basis of interbank correspondent relations, and clearing (netting) settlements. (BIS 2003, p. 5)
A new concept paper on the reform of the Russian payment system is now being prepared within the CBR. As a part of future payment system strategy, the CBR should develop a more formalized oversight relationship with private sector schemes, whether systematically important or not. In addition, the IMF recommended a closer oversight relationship of the CBR with Sberbank. (IMF 2003, pp. 43, 46)
D. The central bank, in promoting payment system safety and efficiency through the Core Principles, should cooperate with other central banks and with any other relevant domestic or foreign authorities. |
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According to the Federal Law on the Central Bank of the Russian Federation (CBR) of 2002 the CBR may participate in activities of international organizations that promote monetary and banking co-operation, including co-operation between central banks of foreign states. Relations between the CBR and credit institutions of foreign states shall be established in compliance with international treaties of the Russian Federation, federal laws and interbank agreements. (Law on the CBR 2002)
As an operator of its own payment system, the CBR co-ordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, setting guidelines for their functioning, and establishes non-cash settlement rules, forms, terms and standards, as well as organizes cash circulation. In addition, it establishes the procedure for compiling and presenting statistical reports characterizing the Russian payment system in order to make it more transparent. (CBR 2003)
During the Financial Sector Stability Assessment in 2003 the IMF recommended that the CBR ensure that there are contact lines in place with foreign oversees and regulators in case a Russian bank experiences liquidity problems in a foreign payment system or vice versa. (IMF 2003, p. 46)
Russia