Banking services in Russia: theory and fact


Candidate Name: ...........................................Polozov
Alexander.
Category and Candidate Number: ...........................0-0460-013



Extended essay.


Economics.

Banking services in Russia: theory and fact.
Abstract.

The topic of my essay is the banking system of Russia. The situation in
Russia nowadays, due to the historic and unprecedented changes occurring in
this country, is one of the most interesting fields of analysis and
research. While studying the 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 do not follow laws and regulations. So in my research I try to
answer two questions.
Is the banking system in Russia fully developed?
Bank services in Russia: theory and fact. Do they differ?
In order to answer the first question I compared the European banking
system to the current banking system in Russia as it is regulated by laws
and by governmental acts and decisions.
 In order to answer the second question I analyzed the information I
received while studying the activity of the Incombank branch in
Chelyabinsk and while interviewing clients of other banks in Chelyabinsk in
the summer of 1997.
I have analyzed the theory and fact of the banking system from the
definition of non-traditional operations and could state that out of seven
positions  I have looked into, only in four does the banking system in
Russia agree with the European banking system. The differences lie in the
limitations for the private sector and in prolonging bank operations for
companies. From this information, we can conclude that the Russian banking
system has not fully developed yet.
Evaluating the activity of Russian banks in practice I could state that
theory and fact differ along all lines.
The Russian government should review its banking regulations and banks
should enforce these laws without breaking them.
                Banking services in Russia: theory and fact.
      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.
       In order to answer the second question I analyzed the  information  I
received  while  studying  the  activity  of  the  Incombank  branch  in
Chelyabinsk and while interviewing clients of other banks in Chelyabinsk  in
the summer of 1997.
      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.  Commercial  organizations,
which work at the market and in production, take loans for  their needs  and
conduct all payments with buyers and sellers through  them.  Landowners  and
owners of real estate take loans from the banks to buy an estate or to  make
use of it and pay back loaned money.
      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 services  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 huge productive force. A bank does  not
just collect money - it converts non-working,  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 any country depends on healthy banking  services.  Now
we will see if the banking system in Russia and, in particular, in  my  home
city of 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.[i]
      Credit operations  are the operations of giving loans to bank  clients
and receiving, in exchange interest rates on those loans. Credit  operations
are the main operations of a bank. Banks are the biggest center  of  credit.
Credit operations form  the  main  specific  weight  of  any  banks  assets
because they give the biggest profit to the banks.[ii]
      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 or 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.[iii]
      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.[iv]
      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  even  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.
      All other services are included in non-traditional services. There are
many of them, such as:
      intermediary services;
      services directed to the companies development  (inculcation  of  the
stock exchange, placing shares, juridical help, information services etc.);
      giving guaranties and collateral;
      trusting  operations  (including  consultations  and   help   in   the
management of the clients property);
      providing accounting help to the companies;
      presenting the clients interests in the court;
      tourists services etc.[v]
      All banking services are also subdivided into paid and free  services.
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.[vi] 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.[vii]
      Now, for every service, we will compare how it should  work  according
to the law and  how  it  really  works.  All  further  information  will  be
presented in facts taken from the activity of the  Incombank  branch  in
Chelyabinsk for the 1997 year.
      In order to illustrate the problem of deposit  operations  I  have  to
dwell upon some facts of the history of our economic system. First  of  all,
in 1992, after the fixed prices were freed in Russia, a crisis  occurred
with money circulation. It also led to hyperinflation.  So  the  money  with
which you could buy a car in 1985, changed in 1993 to worthless  paper  with
which you could hardly buy a book. The situation became even worse when  the
banks decided to give out the limited amount of money  to  any  client  (not
more than 500 roubles in one month) even if this client had a larger sum  of
money on his account. Therefore, with hyperinflation, 5000  roubles  on  any
account in 1985 (5319$), in 1993 became 12$ with  interest  rates.[viii]  So
everyone who had a long-term deposit  lost  all  his  money.  Also,  it  was
popular among Russians to open saving deposits, for  1000  roubles  (1063$),
for their new-born children which were paid to the bank  for  several  years
and could be taken out only when the children who were insured  reached  the
age of 18.[ix] Everyone who was too young to take his money  lost  it.  Even
now, while I am writing this work, the central bank and the  government  are
putting into action another historical  swindle,  erasing  three  zeroes  on
banknotes.[x] Even after the central bank  had  promised  their  clients  to
recalculate the savings made before the  90s  according  to  the  level  of
inflation all money will loose three  zeros.[xi]  So  that  which  was  1000
roubles (1063$) in 1985, will now  become  1  rouble  (16  cents).[xii]  The
central bank has fooled everyone in the country. Who will  trust  the  banks
after this point? No one. This lack of trust has led to a  shortage  in  the
money supply to banks. This situation in the country creates a  distrust  of
clients to banks, on one hand, and of banks  to  government  policy  on  the
other hand. The result is that the deposit operations have  become  less  in
value and shorter in terms.
      In the situation of shortage, banks have had to decide  how  to  raise
their money supply. They have decided to do it in a real new Russian  style:
if people do not want to give them their money, the banks  will  force  them
to do it. For instance, in our town Incomebank signed an agreement  with
almost all factories and  big  companies  about  paying  salaries  to  their
workers through the bank credit cards.[xiii] The same agreement  was  signed
with all institutes and colleges. Now, students can  withdraw  their  grants
only by their Visa and STB cards. Before this, the owners of  credit
cards had been very rich  people.  Perhaps  the  bankers  figured  that  new
owners had to feel happy about receiving one of the privileges of the  rich,
but the people did not. They now must pay 20$ every year for a  credit  card
and 5% on every amount which they take in cash.[xiv] In  such  a  way  banks
have forced common workers to keep their money with banks.
      Payment operations in Russia are not developed yet. There  are  almost
no payment services for the private sector. First of all,  this  is  because
just a few shops in our city accept credit  cards.  The  second  reason  for
this is because a private  person  is  not  allowed  to  make  any  transfer
payments.[xv] Movements of money from a buyer to a seller  take  place  only
by cash, and if someone wants to buy a house or a car he must pay the  whole
amount in cash. This is why Russian people abroad  almost  always  pay  with
cash. It is because they cannot transfer their money  abroad  and  even  pay
for their holidays by transfer payments. It is  still  so,  even  after  the
central bank representative appeared on a TV  news  broadcast  and  gave  an
interview to important newspapers insisting from  now  on  people  would  be
allowed to make transfer payments abroad -  but  not  more  than  2000$  per
operation. He said that in May of  1997  and  still  nothing  has  happened.
Still, nobody can transfer even 500$ abroad. Dangles,  everyone  knows  that
the law already exists but banks cant transfer money because  they  do  not
have the permission to do so.[xvi] It makes life  for  more  difficult  many
people, because they can take only 500$ abroad or not more than 10000$  with
a bank document.[xvii]  Such a document shows that a  person  has  exchanged
that amount from roubles to dollars. If a man goes to  Europe  for  a  short
holiday it will be enough, but if he is going to live there for a long  time
or he is going to study there he has a problem. He is  allowed  to  have  an
account abroad for a time while he is there, but  nobody  can  transfer  any
money to pay his expenses.
      Payment services for companies are also not very convenient for  their
users. Payment operations and all money transfers inside  Russia  are  going
through a special branch of the central bank  in  the  city  and  everywhere
where money stops it spends some time and is used. If you give an  order  to
the bank to transfer the money in one day, you will be lucky if they  do  it
two days after that, then when this special branch of the central bank  gets
the money it takes it 3-5 days to record the operation and just  after  that
it will send the money to the next bank, and even  the  bank  to  which  you
have transferred  the money will keep it for 2-3 days before they will  tell
you that they have already received it.[xviii] This is only if that  payment
operation is inside your city. If you are transferring the money to  another
city then the special central bank branch of your city transfers  the  money
to the same branch in the town you are transferring the money to  and  there
the money is recorded again and after 3-5 days the  bank  receives  it.[xix]
The shortest time in which you can transfer money from one bank  to  another
inside one city is 7 days, and between two cities about 10  days.  According
to the law it has to take only 3 days in local  operations  and  6  days  in
interurban operations -  the time while the special branch  of  the  central
bank keeps the money.[xx] It is also not a very short  period  of  time  but
better than 15 days - the period it takes  to  transfer  money  in  reality.
This has led to an  increasing  number  of  illegal  cash  payments  between
companies.
      Payment operations for companies outside Russia are  more  complicated
than anything else in the bank system. You  must  sign  a  contract  with  a
foreign company about  buying  goods  there.  Then  you  have  to  show  the
contract on that bargain to the Customs with all  prices  and  the  list  of
goods purchased. After they have checked everything they  issue  a  passport
and register the number of the transaction. Only after that you are  allowed
to send an exact amount of money for which  you  have  the  passport.  After
this, you are allowed to give an order to the bank  about  transferring  the
exact amount from your  rouble  account  number  to  your  currency  account
number. In other words you are buying currency. It takes the bank  up  to  5
days: it depends on availability  of  that  currency.  After  the  money  is
exchanged you are allowed to give the payment order to the bank to  transfer
the money. Than the money goes to the special central bank branch  and  only
after that goes to the foreign bank.[xxi] But the procedure  isnt  finished
yet. After getting the goods the duty-agencies are checking  everything  and
just after all taxes and custom duties are paid the passport of the  bargain
can be closed.[xxii] The whole operation takes about  8-10  days,  including
all customs checks. According to the law it has to  take  you  only  3  days
when the special central bank branch keeps the money, plus the  time  needed
for custom-agencies to check and register  the  documents.[xxiii]  Thus,  it
seems that payment operations are set up with  the  aim  of  delaying  money
transfers and of keeping money inside  the  country.  It  looks  as  if  all
clients just interfere with the activity of the banks and they  even  behave
as if it would be better for everyone if clients just gave  their  money  to
the banks for their needs and would not  interrupt  their  work  again  with
their requests.
      The main aim of the credit system world-wide is to  raise  investments
for the economy of the country. So the credit system should attract  clients
to borrow money from the bank by offering low  interest  rates  and,  simple
procedures. The bank has to invent  a  means  of  doing  that,  because  the
welfare of the bank depends on it. In our city in Russia,  it  looks  as  if
our credit system is  opposed  to  a  European-type  credit  system  and  is
created to scare  off  all  borrowers  with  high  interest  rates  and  the
unwillingness of the banks to give any  loans.  Now  I  will  show  it  with
facts.
      According to the law, credit operations for the private  sector  exist
in  our  city.  Banks  should  give  credit  to  people  to  buy   expensive
goods.[xxiv] Yet banks refuse to do that for anyone for any reason,  because
it does not give them big profits and takes away a certain amount  of  money
for up to 10 years. Thus, this  operation  is  almost  nonexistent.  On  the
other hand people rarely want to take such loans. First of all  because  the
companies where they work cannot take big loans  for  the  replenishment  of
current capital. For this reason, companies  have  to  work  on  prehistoric
equipment, without having any chance to pay suppliers and to  pay  wages  to
workers. How can people consider taking a loan for 10 years if they have  no
stable income? A vicious circle persists.[xxv]
      The credit system for companies is developed better than that for  the
private sector. But even to companies, banks do not want to issue any  loans
because of the high risk of losing money. Before if a  bank  lost  money  on
loans it was compensated by high profits on the financial  market  and  also
by inflation. The less the better became a slogan of the banks.  Now  they
demand a higher security of loans and higher a profitableness  of  projects.
To secure their investments, banks have begun to  acquire  big  packages  of
shares of the companies into which they invest.  So  the  obtaining  of  the
loans is limited now but the demand for credit is huge.[xxvi] Companies  are
experiencing a shortage in current capital and need money  for  investments;
the private sector is looking for acceptable consumer  loans  and   mortgage
loans. Thus, in  this  situation  even  at  high  interest  rate  loans  are
difficult to get. Banks create their own rules of giving  loans  and  decide
who is worth the loan and who is not. Now  it  looks  as  if  banks  gave  a
priority to companies which are involved in  trade-intermediary  activities.
Under the conditions of the currency corridor the profitableness  of  import
trade operations is relatively high, and the circulation  of  the  money  is
quick. Therefore these companies can take short  term  high  interest  rates
loans.[xxvii] Incombank gave about 45% of its credit resources  to  such
companies. Also, banks still give credits to  fuel-power  complexes  and  to
metallurgical companies. To finance these companies  Incombank  gave  up
to 30% of its resources.[xxviii]
      While giving loans, banks take into consideration the security of  the
loan as well. This is a well-established practice in  all  banking  systems.
But in Russia banks  choose  to  take  only  real  estate  and  property  as
security. The terms of loans are also peculiar in Russia. The  loan  has  to
be not more than 70% of mortgage, and the interest  rate  is  floating  from
25% up to 35% a year on currency loans and from 100% up to 180%  a  year  on
rouble loans.[xxix] But as the demand for loans is  huge,  banks  feel  like
kings, because whether or not a company  depends  on  their  decision.  This
leads to demoralization and corruption in the banking  system,  even  though
each banker signs the honor code of bankers in the Association of  Russian
bankers.[xxx]
      Cash operations in Russia also operate on a low level. In  consequence
of the shortage of money, almost all deposit money is given  away  as  loans
and investments. So it often happens that a bank does not have enough  money
to pay out to clients. Even  the  existence  of  the  federal  bank  reserve
requirement (10%) does not scare banks and they often have less  cash.[xxxi]
The run on a bank has become a common practice in  our  banking  system  and
banks have become used to it. Nowadays people can get only up  to  1000$  on
first demand, and they have to order any amount of money higher  than  1000$
in advance. They will have to wait for their turn  to  get  the  money.  The
government even sets a time limit for this operation: up to  5  days.[xxxii]
Yet banks often break that law, excusing themselves with a shortage of  cash
money. Also, the owners of credit cards have  problems  with  getting  money
from them. In spite of the fact that the  banks  have  signed  an  agreement
with the European banking system about cooperation, banks in Russia  do  not
execute that agreement. In our banks even the owners of  gold  credit  cards
with the limit up to 25000$ can take only 5000$  per  operation  on  general
foundations.[xxxiii] That means that they have to wait up  to  5  days  each
time to get 5000$. According to the agreement and to the law banks  have  to
pay out the amount of money in the limit borders immediately.[xxxiv]
      From additional  operations  banks  commonly  practice  only  currency
operations, because they do not have licenses  for  other  operations.[xxxv]
Even currency exchange presents a lot of problems for individuals. First  of
all people  have  to  bring  their  passports  for  that  operation  or  for
registration of any kind of exchange in tax agencies. Thus, the  privacy  of
that operation has disappeared, and that leads to the  development  of  that
operation  on  the  black  market.  If  banks  go  on  creating   impossible
conditions  for  clients  that  will  lead  to  the  development  of   these
operations on the black market and, therefore criminal  groups,  instead  of
banks, will invest the huge profits in to the industry.
      Non-traditional operations in Russia do not exist at  all.  Or  rather
they are written down in regulations for the banks but the demand for  these
services in Russia is zero. This is because no  one  trusts  the  banks  and
banks do not want  to  practice  that  activity  either,  because  of  small
profit. In our city not a single bank has in  its  staff  a  person  who  is
occupied with one of the non-traditional operations.[xxxvi]
      Having analyzed the information I can now  show  it  in  simple  data-
bases. To answer the  question  if  the  Russian  banking  system  is  fully
developed, I will compare the theory of generally accepted European  banking
services to the results of my essay.
                         The Russian banking system:
|agree in:                     |differs in:                         |
|definition                    |Payment operations in private       |
|deposit operations            |sector:                             |
|credit operations for         |no transferring of the money allowed|
|companies                     |                                    |
|non traditional operations    |2.Payment operations for companies: |
|                              |                                    |
|                              |all operations through the central  |
|                              |bank                                |
|                              |time delays are allowed by the law  |
|                              |payments abroad are through custom  |
|                              |checks                              |
|                              |Credit operations in private sector:|
|                              |                                    |
|                              |maximum term of loans is 10 years   |
|                              |Cash operations:                    |
|                              |time delays are allowed by the law  |
|                              |Additional operations:              |
|                              |only the central bank has the       |
|                              |license for operations with gold,   |
|                              |precious metals and ingots          |
|                              |tax-agencies register and check     |
|                              |currency operations                 |


      As we can see there are a number of differences  between  the  Russian
banking system and the European banking system. This means that the  Russian
banking system has not fully developed yet.
        According to my research the Russian theory of  the  banking  system
differs from the established facts. The final results  I  can  show  on  the
following data base.
        The Russian banking system: theory and fact. Do they differ?
|agree in:              |differ in:                                  |
|no points              |Definition of banking system:               |
|                       |not all services are carried out            |
|                       |the laws are not executed                   |
|                       |Deposit operations:                         |
|                       |clients are forced to keep the money on     |
|                       |deposits                                    |
|                       |3.Payment operations in private sector:     |
|                       |few shops accept credit cards               |
|                       |4.Payment operations for companies:         |
|                       |take more time                              |
|                       |5.Credit operations in private sector:      |
|                       |banks are unwilling  to give loans          |
|                       |6.Credit operations for companies:          |
|                       |banks are not objective while choosing      |
|                       |future clients, which leads to corruption   |
|                       |7.Cash operations:                          |
|                       |the withdrawal of money is limited          |
|                       |clients wait for several days to withdraw   |
|                       |big sums                                    |
|                       |8.Additional operations:                    |
|                       |movement of these operations to black market|
|                       |                                            |
|                       |9.Non-traditional operations:               |
|                       |do not exist                                |


      The Russian money institute is called a banking system, so it  has  to
conform to the standards and  try  to  approximate  the  generally  accepted
level. As we can see from the facts, however, Russia is yet  far  away  from
the accepted  standards  and  the  real  practice  of  the  Russian  banking
services is different from what it should be according to  the  Russian  law
and theory of the banking system. Of course, I do not presume to  present  a
detailed analyses of  all  the  problems  involved.  But  even  my  personal
research can show that the Russian banking system is far from  ideal.  First
of all, all banks are using their superior position in the  finance  market,
and all their activities are boiling down to making bigger profits with  the
minimum risk. Thus, banks are often  breaking  the  law  by  not  conducting
operations in which they could lose their  money,  or  operations  with  low
profitability. The result is that not all operations are fulfilled  as  they
should be, because of the prepossession of the banks to  their  clients.  In
the private sector this situation leads to the distrust of banks by  clients
and, as a result, banks receive less money  for  their  operations.  In  the
situation of time delays  and  other  difficulties  with  money  operations,
companies are losing their money: with a healthy banking  system  a  company
can get a bigger profit. In the situation of unstable economy  banks  should
be the instruments of  the  government  and  should  help  the  industry  to
develop. But in  Russia  everything  is  different:  the  government  issues
impossible laws and banks demand impossible interest rates, delay the  money
and break the law. How can it help the Russian economy? In the end,  clients
are afraid of using banking  services  and  this  apprehension  limits  cash
flows. This leads to less investment in industry, and  undeveloped  industry
is the main problem of the government. On  the  other  hand,  companies  are
receiving fewer loans because of the unwillingness of  banks  to  give  any.
This again leads to undeveloped industry. Therefore  we  may  conclude  that
one reason for the recession in Russia is  the  deficiency  of  the  banking
system that leads to unhealthy  money  circulation.  The  government  should
review its banking laws if it really  wants  to  see  a  stable  economy  in
Russia.
Source of the information:

      . primary:
           . personal interview with a bank official
                 Nina Myakshun,
                 General Manager
                 Chelindbank,
                 Kalininsky branch,
                 Russia, Chelyabinsk,
                 Kaslinskaya 25,
                 454084
                 tel. (8-3512) 35-85-52
           . personal interview with a duty agency official
                 Svetlana Savosina
                 Director of Aeroflot Duty Agency,
                 Ekaterinburg Branch
                 tel. (8-3432) 61-76-97
      . secondary:
           . books:
6. The Civil Law Code of  the  Russian  Federation,  Part  II  (Chelyabinsk:
  Kniga, 1996).
7. Comments on the Law  on  Mortgage  of  the  Russian  Federation  (Moscow:
  Respublika, 1993).
8. Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997).
9. Bank Operations (Moscow: Infra-M, 1995).
5. Lipsits, Economy without Mystery (Moscow: Delo, 1993).
6. Commersant, N6(165) (February, 1996).
7. Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996).

           . broadcast TV news:
                 1. NTV evening broadcast news
                2. ORT evening broadcast news
                3. ORT 6 oclock broadcast news
Bibliography:
The Civil Law Code of the Russian Federation, Part II (Chelyabinsk: Kniga,
1996).
Comments on the Law on Mortgage of the Russian Federation (Moscow:
Respublika, 1993).
Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997).
Bank Operations (Moscow: Infra-M, 1995).
Lipsits, Economy without Mystery (Moscow: Delo, 1993).
Commersant, N6(165) (February, 1996).
Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996).

Note:  As the books I have used are published in the Russian language I
have translated the titles into English for the convenience of those who
are going to read the Bibliography.
Footnotes:

-----------------------
[i] Bank Operations (Moscow: Infra-M, 1995) 17.
[ii] Bank Operations (Moscow: Infra-M, 1995) 17-18.
[iii] Bank Operations (Moscow: Infra-M, 1995) 19.
[iv] Bank Operations (Moscow: Infra-M, 1995) 19.
[v] Bank Operations (Moscow: Infra-M, 1995) 21.
[vi] Commersant, N6(165) (February, 1996) 29
[vii] Commersant, N6(165) (February, 1996) 24.
[viii] Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996).
[ix] Interview with a bank official. (24.08.97)
[x] Media information.
[xi] Media information.
[xii] Interview with a bank official. (24.08.97)
[xiii] Interview with a bank official. (24.08.97)
[xiv] Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996).
[xv] The Civil Law Code of the Russian Federation, Part II (Chelyabinsk:
Kniga, 1996) 43.
[xvi] Interview with a bank official. (24.08.97)
[xvii] Interview with a duty agency official. (27.09.97)
[xviii] Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997)
28.
[xix] Bank Operations (Moscow: Infra-M, 1995) 68-74.
[xx] The Civil Law Code of the Russian Federation, Part II (Chelyabinsk:
Kniga, 1996) 86-89.
[xxi] Interview with a bank official. (24.08.97)
[xxii] Interview with a duty agency official. (27.09.97)
[xxiii] The Civil Law Code of the Russian Federation, Part II (Chelyabinsk:
Kniga, 1996) 128-130.
[xxiv] Comments on the Law on Mortgage of the Russian Federation (Moscow:
Respublika, 1993) 7.
[xxv] Commersant, N6(165) (February, 1996) 28-29.
[xxvi] Bank Operations (Moscow: Infra-M, 1995) 76.
[xxvii] Commersant, N6(165) (February, 1996) 26.
[xxviii] Audit Review of Incomebank (Chelyabinsk: Incomebank, 1996).
[xxix] Comments on the Law on Mortgage of the Russian Federation (Moscow:
Respublika, 1993) 26.
[xxx] Lipsits, Economy without Mystery (Moscow: Delo, 1993) 271.
[xxxi] Interview with a bank official. (24.08.97)
[xxxii] Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997)
33.
[xxxiii] Commersant, N6(165) (February, 1996) 27.
[xxxiv] Kochmola, Bank: Payment and Cash Operations (Moscow: E.B., 1997)
43.
[xxxv] Interview with a bank official. (24.08.97)
[xxxvi] Interview with a bank official. (24.08.97)



"Banking services in Russia: theory and fact"