Russian Payment System
Non-cash settlements in Russia are effected
through the Bank of Russia payment system, private payment systems represented
by intrabank payment systems designed to implement settlements between subdivisions of a credit institution, payment
systems of credit institutions designed to implement settlements on
correspondent accounts opened in other credit institutions, payment systems of
non-bank settlement credit institutions and systems designed to implement
settlements between clients of one subdivision of a credit institution
The Bank of
Russia occupies a special place in the Russian payment system. As an operator
of its own payment system, it 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 organises cash circulation. In addition,
it establishes the procedure for compiling and presenting statistical reports
characterising the Russian payment system in order to make it more transparent.
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 (Bank of Russia) and Federal Law on
Banks and Banking Activities, and the Bank of Russia rules and regulations
issued in pursuance of these laws. The relationship between the Bank of Russia
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 Bank of Russia 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
The Bank of
Russia constantly pays special attention to the upgrading of the regulatory
framework ensuring the functioning of the Russian payment system. In 2002, it
approved a new version of Provision No. 2-P "On Non-Cash Settlements in the
Russian Federation," which specified the procedure for effecting settlements by
payment orders paid with an acceptance and defined the finality and
irrevocability of payments in order to safeguard settling participants against
financial risk and make the payment system even more reliable and secure. The
Bank of Russia in 2002 drafted jointly with the Ministry of Finance and
Ministry of Taxes and Duties regulations designed to standardise settlement
documents in order to expedite the transfer of tax and other payments to the
federal budget, the budgets of all levels and government extrabudgetary funds
and the financing of budget expenditures. To improve the organisation of cash
circulation and the regulation of cash settlements, the Bank of Russia and the
Ministry of Taxes and Duties in 2002 made clarifications regarding the Bank of
Russia limit set on the amount of cash settlements between legal entities.
The structure of
the Russian payment system is shown in Chart 1.
settlements through the Bank of Russia payment system, each credit institution
must have a correspondent account opened in a Bank of Russia division. A credit
institution may open a correspondent subaccount for its branch in a Bank of
Russia division unless the parent institution or another branch of the credit
institution is serviced in the same Bank of Russia 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 Bank of Russia. Credit institutions and their
branches that have correspondent accounts (subaccounts) in the Bank of Russia are
its clients. Multi-branch credit institutions open special interaffiliate
settlement accounts to effect settlements between branches. Interbank
settlements between credit institutions are effected through correspondent
accounts they open with one another. In non-bank settlement credit institutions
both credit institutions and legal entities that are not credit institutions
are settling participants. To effect non-cash settlements, corporate and
individual clients must have accounts opened for them in credit institutions
and in some cases stipulated by the law corporate customers may have accounts
opened for them in Bank of Russia divisions.
in the Russian payment system were 1,1721 Bank of Russia divisions,
1,331 operating credit institutions, including 41 non-bank settlement credit
institutions, and 3,326 branches of credit institutions. In addition,
settlement services were provided to clients by 6,387 additional offices of
in the Russian payment system opened 271.4 million bank accounts for their
clients (both residents and non-residents) in the Russian currency, of which
4.2 million accounts (1.6%) were opened for legal entities that are not credit
institutions and 267.2 million accounts (98.4%) were opened for private
individuals; most of the individual accounts (90.1%) were opened in the Savings
Bank (Sberbank). The number of bank accounts per resident of Russia stood at 1.9 on average.
Russia had on average one participant in
the payment system per 24,700 residents and 660 legal entities. At the same
time, taking into account the additional offices opened by credit institutions
and their branches, the respective ratios were one payment system participant
per 11,800 residents and 315 legal entities.
In 2002, the Russian payment system made 737.9
million payments to the amount of 130.1 trillion rubles, an increase of 22.0%
year on year, a rate higher than inflation. That along with a 16.5% increase in
the number of payments was the result of a rise in business activity of
between non-cash payments effected by the Bank of Russia payment system and
private payment systems in the country’s payment system remained virtually
unchanged in 2002 (Chart 2).
effected through the Bank of Russia payment system accounted for a large
proportion of non-cash payments: 47.6% in number and 58.7% in volume. 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 minimises the latter’s financial risk.
development of the Bank of Russia payment system is accompanied by the rapid
development of private payment systems, which allows credit institutions and
their clients to optimise their payments, reducing payment periods and costs.
order remains the principal instrument of payment used in effecting non-cash
settlements, accounting for 77.1% of the total number of payments and 90.6% of
the total volume of payments.
are a predominant form of settlements because they are widely used as payment
for goods and services and in non-commodity operations, such as the transfer of
taxes, duties and other compulsory payments to the budgets of all levels and
extrabudgetary funds. Their wide use is also connected with rapid growth in electronic
payments, which help reduce settlement periods to a minimum.
payment such as payment requests, collection orders, letters of credit and
cheques issued by credit institutions account for a small part of non-cash settlements: 1.9% in number and 0.7%
instruments of payment, such as payment orders, which are used in partial
payment of settlement documents when a client has not enough funds in his
account and in a number of special cases when a bank’s details or a bank’s clients’ details have changed accounted for
21.0% in number and 8.7% in volume.
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.
Most of the
payments effected through the Russian payment system are intraregional
payments, which account for 91.0% of the total number and 84.1% of the total
value of payments. Interregional payments account for 9.0% and 15.9%
amount of cash passing through the cash departments of the Bank of Russia and
credit institutions in 2002 rose 32.5% year on year under the effect of growth
in nominal money income and consumer prices. This represents a slowdown of 5.9
percentage points on 2001 growth. The average daily cash turnover expanded by 8
billion rubles to 32.2 billion rubles.
The Bank of
Russia and credit institutions supplied with their own cash resources 96.1% of
their clients’ needs in cash.
In all, Russia issued 8.3% more cash in 2002 than
in 2001. Growth in the issue of cash resulted from a 29.4% increase in wage
payments owing to a rise in the minimum wage, pension indexing and growth in
cash payments from household accounts.
The rate of
growth in cash turnover in 2002 (32.5%) was faster than the rate of expansion
in non-cash payment volumes (22%).
important element of the Russian payment system is the Bank of Russia payment system.
the whole, the Bank of Russia payment system ensures the effectuation of
settlements on payments in rubles, using funds kept in accounts in the Bank of
Russia. It is a gross system effectuating all payments on its participants’
accounts on an individual basis.
The regional branches of the Bank of Russia
are situated in the Russian regions which, by and large, coincide with the
official territorial division of the Russian Federation and in some cases there is one Bank
of Russia branch for several constituent entities of the Russian Federation.
Each of the 78
Bank of Russia regional branches has the regional components of the payment
system functioning within it.
Payments in the
Bank of Russia payment system are effected on two levels: there are
intraregional payments, that is, payments effected within one regional
component, which account for the largest portion of payments effected through
the Bank of Russia payment system (almost 90% in number and 82% in volume), and
interregional payments, that is, payments that originate in one regional
component and end in another.
The Bank of
Russia payment system ensures:
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;
possibility of managing liquidity by extending collateralised intraday loans to
credit institutions (in Moscow, St. Petersburg and Yekaterinburg);
implementation of the Bank of Russia monetary policy by handling loan, deposit,
currency and other transactions conducted by the Bank of Russia;
on the securities and foreign exchange markets.
security and safety of information inside its payment system, the Bank of
Russia 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
Bank of Russia
payment system participants comprised 1,172 Bank of Russia branches and
divisions, 1,331 credit institutions and 1,773 branches of credit institutions,
which, according to the BIC Directory, had correspondent accounts (subaccounts)
opened for them in the Bank of Russia.
The number of
credit institutions that opened correspondent accounts in the Bank of Russia
rose by eight in 2002, or 0.6%, and the number of branches of credit
institutions that have correspondent subaccounts in the Bank of Russia fell by
44, or 2.5%, owing to the continued reorganisation of the branch network of
applicable legislation, the Bank of Russia provides settlement services to more
than 66,000 clients that are not credit institutions: the bodies of the Finance
Ministry’s Federal Treasury, government and local self-government bodies and
their organisations, government extrabudgetary funds, military units and other
clients that are not credit institutions in the regions where there are no
credit institutions, and other persons in the cases stipulated by the federal
laws. The number of the Bank of Russia’s client Federal Treasury bodies stood
In 2002, the
number of such clients of the Bank of Russia declined by 10.8%, mainly as a
result of the transfer of budget-financed organisations and regional and local
budgets to the servicing by Federal Treasury bodies and the establishment of
treasuries in Russian regions and municipalities and similar structural changes
carried out by them.
The Bank of
Russia payment system effected 350.7 million payments (1.4 million payments a
day on average) with an annual volume of 76.3 trillion rubles. Compared with
2001, the number of payments increased 23.8%, the average daily number of
payments rose 27.3% and the volume of payments expanded 20.5%. The increase resulted,
above all, from growth in the number of payments made to the budgets of all
levels and the need to make a detailed accounting of these payments for
effective budget formation and allocation.
participants in the Bank of Russia payment system are, as in the previous
years, credit institutions and their branches, which accounted for 82.4% of the
total number of payments and 79.5% of their total volume.
effected by Bank of Russia clients that are not credit institutions accounted
for 16.4% and 19.8% of all payments respectively and payments by Bank of Russia
branches and divisions on their own settlement operations for 1.2% and 0.7%.
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.
The turnover of
average balances of funds of credit institutions and their branches in
correspondent accounts and subaccounts in the Bank of Russia in 2002 stood at
0.32 days, or 3.14 turnovers a day, against 0.42 days, or 2.4 turnovers a day,
of turnovers resulted from a rise in the activity of credit institutions and
their clients, the consolidation of credit institutions’ accounts and more
efficient management of liquidity, which is facilitated by the measures taken
by the Bank of Russia to spread the use of electronic settlements and reduce
The Bank of Russia is taking steps to enhance
the efficiency of its payment system, especially by making persistent efforts
to spread the use of electronic settlements, which accounted for 92.7% of the
total number of payments and 92.1% of the total volume of payments (Chart 3).
payment system consists of interregional and intraregional electronic payments.
uniform interregional electronic payment rules for all regions, set by a Bank
of Russia regulation.
There is a Bank
of Russia institution in each region which is the main settling participant and
which is assigned the function to make the accounting for and control
interregional electronic settlements.
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.
interregional electronic payments are made, the exchange of messages is
conducted between the main divisions of the Bank of Russia through the Bank of
Russia Interregional Computer Centre, which does not effect settlements but
fulfils the communication functions and serves as a centre for the transmission
of messages. Interregional electronic payments are effected by the regional
branches of the Bank of Russia on a bilateral basis, using the "each to each"
scheme, on the accounts opened with one another (Chart 4).
The procedure for effecting intraregional
electronic payments, including electronic payment exchange and processing
schedules, electronic message formats and cryptographic protection means are
established by the rules drafted by Bank of Russia regional branches, taking
into account the requirements of Bank of Russia rules and regulations. The only
exception is the procedure for effecting electronic payments in the Moscow
Region, which is established by a Bank of Russia regulation, because these
payments account for a large portion (23% of the total number and 60% of the
total volume) of payments effected through the Bank of Russia payment system.
Settlements on intraregional electronic payments are effected within one day.
and intraregional payments are recorded in credit institutions’ correspondent
accounts in Bank of Russia institutions in conformity with the corresponding
accounting records (Chart 5).
In 59 out of the
total 78 Bank of Russia regional branches settlements are effected by the
centralised method and in 19 by the decentralised method. Of the 59 Bank of
Russia regional branches indicated above, 55 conduct the continuous processing
of payments within one day and in three on a discrete basis several times
during the day. The Bank of Russia Moscow branch processes payments both
discretely and continuously. The continuous processing of payments makes it
possible to write down and enter funds on intraregional payments instantly,
creating conditions for the acceleration of their turnover.
The participants in intraregional electronic
settlements were 1,138 Bank of Russia institutions, or 97.1% of their total
number, while the participants in interregional electronic settlements were
1,083 Bank of Russia institutions, or 92.4%.
The Bank of
Russia is taking steps to engage its clients in the electronic document exchange.
Seventy-six Bank of Russia regional branches exchanged electronic documents
with 2,771 credit institutions and their branches, or 89.3% of the total number
of credit institutions and their branches serviced by the Bank of Russia.
Simultaneously, the Bank of Russia is making efforts to engage in the
electronic document exchange its other clients that are not credit
institutions, especially the Federal Treasury bodies. The latter’s share of the
participants in the electronic document exchange with the Bank of Russia stood
at 28.8% of the total.
The Bank of
Russia payment system employs the V-type structure of the message flow, in
which all information about a payment, including information about the payee,
the credit institution that provides services to him and the purpose of the
payment, initially goes to the Bank of Russia, which processes it and makes a
final settlement (Chart 6).
settlements effected through the Bank of Russia payment system use both
full-format electronic payment documents, which need not to be accompanied by
settlement documents on paper, and abridged-format electronic payment
documents, which must be followed by settlement documents on paper.
Bank of Russia’s
efforts are designed to increase the share of payments made by full-format
electronic payment documents containing all information about the payment.
effected by the Bank of Russia on paper (7.3% of the total number and 7.9% of
the total volume of payments) if there is a client’s instruction to make them
by mail or telegraph, if electronic payments are to be accompanied by
settlement documents on paper, containing all information about the payment,
and also in some regions where electronic payments are not effected in
accordance with the decision of the Bank of Russia. The average actual
settlement period for paper payments accounted for 1.1 days at intraregional
level and 4.8 days at interregional level.
The Bank of
Russia introduced from January 1, 1998 a fee for provision of settlement
services in order to demonopolise the system of settlements in Russia and create conditions for
developing alternative services provided by the private sector.
The Bank of
Russia pricing policy is based on fixed rates, regardless of the amount of
payment set for the processing of one settlement document. The fees charged by
the Bank of Russia for the settlement services differ, depending on the method
of payment (electronic payments, payments by mail and telegraphic payments),
the method of passing settlement documents to the Bank of Russia by clients (by
communications channels on magnetic or paper carriers) and the time of passing
settlement documents to the Bank of Russia by clients through communications
channels within the time period established for their receipt.
To encourage its
clients to use the advanced communications facilities and electronic payments,
the Bank of Russia 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 (700 rubles as of January 1, 2003).
Table 1 shows the effective fees charged for
the settlement services provided by the Bank of Russia.
|Method of payment
||Method and time period of transmission
of settlement documents
||Price range (in rubles)
|By communications channels:
| - before 4 PM
| - after 4 PM
|on magnetic and paper carriers
|Telegraphic and postal
|By communications channels:
| - before 4 PM
| - after 4 PM
|on magnetic and paper carriers
|Telegraphic and postal
In addition, the
Bank of Russia charges 2.40 rubles for making a paper copy of an electronic
fees for the settlement services it provides to its clients, the Bank of
Russia, in pursuance of the applicable legislation, conducts some operations
free of charge. These are mainly operations with federal, regional and local
budget funds and government extrabudgetary funds, including tax transfers and
Federal Treasury operations. Although the number of client payments processed
by the Bank of Russia is rising, the ratio between payments effected for a fee
and free of charge remains practically unchanged. Hence the structure of
settlement services from the viewpoint of their provision for a fee or free of
charge does not change much: the Bank of Russia conducted 39.9% of operations
for a fee and 60.1% free of charge (Chart 7).
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.
effected through settlement systems between clients of one division of a credit
institution or a branch of a credit institution account for 65.0% of the total
number of payments effected through
private payment systems and 56.9% of the volume of such payments and
payments between the divisions of one credit institution account for 29.9% and
22.6% respectively. These figures show that credit institutions have upgraded
their own settlement systems, allowing the economic agents they service to make
settlements more effectively.
The share of
payments conducted through credit institutions’ correspondent accounts opened
in other credit institutions was 4.5% in number and 19.1% in volume. At the
same time, these payments demonstrated the most rapid rates of growth (36.7%
and 37.0% respectively), whereas payments effected through the Russian payment
system increased 16.5% in number and 22.0% in volume.
through non-bank settlement credit institutions accounted for 0.6% of the
number of payments made through private payment systems and 1.4% of the volume
of such payments (Chart 8).
including cards issued by credit institutions (bank cards), are an instrument
of payment in Russia used in effecting non-cash retail
payments and receiving cash.
institutions issue and/or acquire bank and other payment cards of the Russian
and international payment systems and their number amounted to 15.5 million.
Russian cards accounted for 51.7% and international cards for 48.3%.
The number of
payment card operations conducted in Russia amounted to 281.2 million, an
increase of 147.5% year on year, and their volume expanded 163.7% to 720.7
billion rubles. Such significant growth in bank card operations is the result
of the dynamic development of the infrastructure designed for such operations.
The number of ATMs rose 53.7% in 2002 to 9,000, cash dispensers 5.7% to 14,100
and trading and services cnetres accepting payment cards 52.2% to 49,100. At
the same time, the share of card payments for goods and services expanded
slightly in 2002, from 0.9% in 2001 to 1.3% of the total volume of paid
services and public catering and retail trade turnover.
operations accounted for 92.8% of the entire volume of card operations and the
share of card payments for goods and services stood at 7.2%. Cash withdrawal
operations made up such a large portion of card payments because many companies
are using bank card schemes in paying wages and salaries to their workers and
The Bank of
Russia publishes materials on the state and functioning of the Russian payment
system in the press open for the general public (see Bank of Russia periodicals
Dengi i kredit (Money and Credit) and
Byulleten bankovskoi statistiki (Bulletin
of Banking Statistics) and in publications for office use (the bulletin Obzor platezhnoi sistemy Rossiiskoi
Federatsii (Review of the Russian Payment System).
upgrading the payment system, the Bank of Russia develops new methodologies and
works out practical solutions designed to facilitate the introduction of a
real-time gross settlement system.
1 Data cited here and below stand as of January 1, 2003 or for 2002.
Updated: June 11, 2003
Source: The Bank of Russia