Resource centers interact not only with ordinary citizens, large companies and officials. They develop mutually beneficial cooperation also with other structures, forming the so-called market of interbank loans.
How is the mutual assistance process implemented, what types of refinancing are known and what are their features? Read on for answers to these and many other related questions.
The concept of MBC
Interbank loans are loans that are provided by one authority to another. They are designed to regulate the solvency (liquidity) of the latter. The main sponsor in the Russian economic market is the Central Bank. Other commercial and government organizations are both creditors and debtors.
Interbank deposits (credits) are a fairly large mechanism. The essence of itfunctioning consists in the execution of debt transactions of a single type, as well as in the placement of loans in other banking structures. In other words, in the event of a lack of resources, the firm acquires assets for a predetermined period in debt. In case of their excess, it puts up assets for sale to other representatives.
Usually, interbank loans are provided for a short period. In accordance with the standard line of loans, funds are issued for 1, 2, 9, 14 and even 90 days. It should be borne in mind that, by agreement of the parties to the transaction being executed, the loan period may be delayed up to one and a half years.
Agreement regarding refinancing can be determined both through individual negotiations and with the help of intermediaries. The next step is to conclude a legally certified contract.
Commercial structures of the Russian Federation, which most often come to the Central Bank of Russia to obtain an interbank loan, are sponsored by two methods: the first is the issuance of funds in a strict order of priority, and the second is carried out on the basis of banking competitions.
Thus, a mechanism in which several structures take part is a kind of source that allows them to negotiate on a mutually beneficial basis through cooperation, and then maintain and maintain their own solvency.
Interbank lending market
One of the main components of the interbank loan marketis considered to be the IBC exchange. It consists of certain transactions with funds implemented by the Central Bank and other bodies. Loans that are issued to bank branches are called managed liabilities. It is worth noting that the organization itself in this case is an active person: it receives funds by direct contact with a representative of the financial center.
Thus, the market for interbank credit (interbank transactions) acts as a sponsor for a variety of economic activities. It keeps them liquid and stable.
It is expedient to characterize the exchange of the SBU operating in the Russian Federation as underdeveloped and narrow. First of all, this can be explained by the mistrust that arises between partners.
According to the analysis, 90% of loans issued by state and commercial lenders to each other have a term of up to one week. It can be concluded that the market for interbank loans is a structure that operates exclusively in the sphere of correspondent relations. It is about absolute shortness. Moreover, the level of trusting relationships in this market is minimal.
Under the mutual assistance money exchange should be understood as a significant component of the financial pyramid. You should know that it fully ensures the distribution of free funds between credit institutions, and in a timely manner, and also improves the efficiency of the banking mechanism of the Russian Federation. In addition to the fact that refinancing involves supporting the functional state of a particular bankinginstitutions, the country's economy is stabilizing, for which the position of each of the companies of such a plan is extremely important.
To account for interbank loans, which are characterized by a short loan period, a special mechanism operates in the Russian Federation. Its maximum limit is determined by the overnight discount rate, and the minimum - by the amount of one-day deposits of the "volume next" type of the Central Bank of the country.
The presented indicators are included in the group of permanent access operations. They are used to absorb and maintain the liquidity of institutions at the proper level. The lower and upper ranges of interbank lending rates can be adjusted by the main banking authority, both individually and by symmetrically shifting the minimum and maximum limits.
The category of interbank credit is a kind of monetary system that allows partner banking institutions to develop mutually beneficial cooperation and organize uninterrupted service for their own customer bases.
In accordance with the criterion of organizational characteristics of refinancing, interbank loans are classified accordingly. So, term loans should be understood as cash loans, the contract of which indicates the final, exact date of repayment of the debt. A demand loan is a type of lending that is a special deal. According to it, a specific period for the return of the money taken turns into an indefinite period, in other waysIn other words, the lender has the right to demand a refund at any time.
Classification by the criterion of payment
In accordance with the criterion of payment, the following varieties are distinguished: with a market, increased and preferential credit rate. The first of them appears on the basis of market demand and supply, which is formed at the time of issuing a loan. The beginning of the increased percentage of the interbank loan is based on the possible risks associated with the provision of funds to a particular commercial employee. Concessional lending is used quite rarely. It is considered one of the components of a differentiated solution.
Under the security of the loan should be understood as a kind of lending based on the pledge of property, in relation to the part that is pledged within the financial center. It is customary to distinguish the following types of loans:
- partially secured;
According to statistics, most interbank loans are unsecured loans.
Documents for applying for a loan
Next, it is advisable to consider the issue of obtaining an interbank loan. It should be noted that the confirmation of the interaction between the two banking structures is the signing of the general agreement (loan agreement).
So, the bank, which is considered a borrower, needs to provide the employees of the creditor organization with the following package of documents:
- application letter;
- documents that contain information regarding the borrowing bank: its financial position, volume of assets, and so on;
- copy of the charter of a banking institution and a license to conduct financial work;
- a paper with signatures and seals, which serves as confirmation of the decision of employees on a loan;
- a paper that characterizes the loss or profitability of a banking structure;
- document confirming the activity of a credit institution that expects to receive a loan, and notifying the lender of the number of loans issued to customers, also characterizing the number of partners acting as depositors.
Additionally, employees of the structure that issues auxiliary cash resources may require documents with statements about some accounts of interbank loans, balance points for the previous year, as well as at the time of application.
Loan processing methods
Under the loan agreement should be considered the method of obtaining a loan, which is used in the process of processing one-time transactions. It was then that there was no special trust between the lender and the borrower, because before that they had not yet cooperated.
Here, the refinancing period usually varies from a week to a month. It is worth noting that, in accordance with the results of individual negotiations, it may be more.
Preliminarily, representatives of banking institutions, as a rule, agree on interaction by phone or e-mail, after which allagreed details are documented, legally executed and certified.
The interbank lending agreement includes information regarding:
- the size of the loan that the borrower wants to take;
- loan term;
- interest rate level;
- responsibility for compliance with the terms of the transaction and so on.
The interest rate specified in the agreement is determined directly on the day the document is issued, based on the level that has developed in the financial market by that time. A loan agreement, confirmed by seals and signatures, is a legal document. It is used as the basis for court hearings that involve non-payment of borrowed funds.
The master agreement, which indicates transactions in the financial market, is considered the second method of obtaining a loan. This document is a kind of form that provides for the technical aspects of the implementation of operations of the financial and credit plan.
Accounting for interbank loans
Next, it is advisable to consider the issue of accounting. In the banking structure, which is a creditor, the issued interbank loans are accounted for under account 320 “Deposits and loans provided to credit institutions.”
It is worth noting that on the day of debiting funds from the correspondent account of a banking institution that acts as a creditor (if there are no direct correspondent relations between banks) or depositing funds into the debtor's LORO account, the following transactions are relevant:
- Dt 32001-32010 "Deposits and loans,provided to credit institutions.”
- Kt 30102 "Correspondent accounts of credit institutions with the Bank of Russia". We are talking about writing off funds from the correspondent account of the creditor institution.
- Dt 32001-32010 “Deposits and loans provided to credit institutions.”
- Kt 30109 “Correspondent accounts of correspondent credit organizations”. We are talking about crediting money to the debtor's LORO account.
In the structure that is the borrower, received interbank type loans are recorded on account 313 “Deposits and loans received by credit institutions from credit institutions.”
If the borrower receives an interbank loan, the relevant entries are:
- Dt 30102 “Correspondent accounts of credit institutions with the Bank of Russia.”
- Kt 31301-31309 “Loans and deposits received by credit institutions from credit. organizations.”
During the first thirty days, both in the banking structure acting as the borrower and in the creditor institution, interest is charged for the use of an interbank loan. It should be noted that accrued interest is reflected on the final business day of the month. In this case, the following postings apply:
- Dt 70606 Expenses.
- Kt 47426 “Obligations to pay interest”. As a rule, on the amount of interest that is accrued in the borrowing institution.
- Dt 47427 Interest Claims.
- Ct 70601 "Income". As a rule, on the amount of interest that is accrued by the institution acting as a creditor.
So, we have considered the concept, definition, conditions for providing interbank loans. In conclusion, it should be noted that today the Central Bank of the Russian Federation issues the following types of loans secured by securities to other financial institutions.
So let's sum it up. The first stage is the submission of papers for interbank lending. After programming the loan application, the lender bank evaluates the borrower, analyzes its solvency and liquidity at the time of loan processing, ensures the accuracy of the submitted information, and so on. It is worth noting that a positive reaction is favorably influenced by the presence of close contacts with large, representative economic structures, the reputation of which, as a rule, plays the role of security. After the borrower receives approval, a loan agreement is drawn up and signed. Thus, funds are transferred to the settlement (correspondent) account.
There is also a second stage of cooperation. It takes place after the transfer of funds. This is a regular report to the lender by the borrowing institution. This information concerns the purposeful use of refinancing. For the structure that issued the auxiliary loan, it is extremely important that the money taken be invested in the economic and financial area and bring profit as quickly as possible. Only in this way the debtor will be able to return these monetary assets without much loss of their own liquidity and in the shortest possible time.
Shouldnote that the global economic crisis adversely affected the interbank lending system in the Russian Federation. It was after him that the state of the money market deteriorated significantly. Its performance is characterized by rates, which are displayed in the economy through special indicators. Among them, it is important to note the following:
- MIBOR - an average indicator characterizing the number of refinancing placement rates provided by financial divisions.
- MIBID - request for purchase, in other words, the interest rate at which banking institutions are ready to become owners of an interbank loan.
- MIACR. You should be aware that this indicator indicates the actual average rates for practicing loans.
The funds that are borrowed are returned in one payment to the correspondent account of the creditor bank at the end of the loan period. It must be borne in mind that early repayment of the loan is possible only after the written consent of the institution that issued the loan.