Legal status of credit institutions: basic concepts, types, banking law

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

It should be noted that organizations classified as credit organizations have a certain legal status that distinguishes them from other structures available in the state. Consider further their main features, as well as the types and basic principles of activity.

General concept

In accordance with the provisions presented in the legislation currently in force, credit organizations are all those persons with the status of legal entities that are created solely for their own benefit in monetary terms.

Such organizations operate on the basis of a special document - a license. Such permission is issued by the Central Bank of the Russian Federation. On its basis, the organization has the right to carry out all types of banking operations provided for by current regulatory acts.

Regulations

All issues related to the regulation of creditorganizations are reflected in the content of certain regulatory acts in force on the territory of the Russian Federation. These include:

• Regulation "On Identification of Clients by Credit Institutions".
• Civil Code.
• Commercial code.
• The Constitution of the Russian Federation.
• FZ "On credit histories"
• Regulation "On Accounting in Credit Institutions".
• Letters from the Central Bank of the Russian Federation.

Important regulations also include instructions issued by the Central Bank of the Russian Federation, and instructions, as well as provisions ("On the procedure for the formation of reserves by credit organizations", "On banks", "On the mandatory ratios of banks").

The specified acts reflect in detail the principles of operation of the structures under consideration, created on the territory of the Russian Federation, the features of conducting activities, and its main directions.

Signs of credit institutions

The law defines some features by which credit organizations can be distinguished. Let's consider them in more detail.

First of all, it is necessary to determine that any credit institution is a person with the characteristics of a legal entity. Moreover, its distinguishing feature is that it is commercial in nature.

An important factor is the order in which the person was created. It should be noted that on the basis of the law, this organization can be represented only in the form of a business company, inwhich can be an LLC or JSC. As for the form of ownership of the organization, it can be any: private, public or any other.

An essential feature that distinguishes a credit institution from all others is that it is not considered legal without a license to carry out a specific type of activity.

Types of credit institutions

In accordance with certain indicators, credit-type organizations are divided into two types: banking and non-banking. The main difference between them lies in the volume of operations that can be performed: the first type has a much broader scope of authority than the second. Consider further the features of each of them.

Banking organizations

Considering the legal status of credit institutions, it is imperative to pay special attention to banks - institutions that occupy a separate niche in this structure.

Banks are credit-type organizations, the main feature of which is that they have the right to conduct absolutely all types of operations, in aggregate. These include:

• raising funds in the form of deposits by both private and legal entities;
• placement of tangible assets at one's own discretion based on the terms of repayment, payment and urgency;
• opening bank accounts for individuals and legal organizations;
• managing the above accounts.

Classification of banking organizations

Depending on various indicators, all banking organizations operating in the territory of the Russian Federation are classified.

So, depending on whether the organization issues money, they can be divided into emission and commercial. Depending on the nature of the operations carried out by banks, they can be divided into specialized and universal.

Considering the types of credit institutions and the legal status of such structures, it is worth paying attention to their classification by service sector. Depending on this indicator, they can be divided into international, national and local. Based on the presence or absence of structural divisions, banks can be divided into branch and non-branch.

If we take as a basis the features of the formation of the authorized capital, then according to this indicator, organizations of the type in question can be divided into foreign banks, national and joint ones.

Depending on what type of ownership a bank has, it can be categorized as private or public.

Let's consider further the main classified groups in more detail, indicating their main features.

Issuing and commercial banks

It is worth noting that in the system under consideration, the issuing bank is of no small importance. In the Russian Federation, this is one organization - this is the Central Bank. It is the Central Bank that has such a volume of monetary assets that no other similar bank has.organization. It should be noted that the liabilities of the issuing bank are its cash and budgetary funds in circulation. It is this factor that allows the Central Bank to provide support to other banks operating in the country, as well as manage their activities. In addition to all this, the Central Bank of the Russian Federation is filling out the Book of State Registration of Credit Type Organizations, and also maintains the procedure for licensing their activities.

In Russia, as in any other country with a market economy, all settlement transactions are made through the Central Bank. In addition, the issuing bank is entrusted with a whole list of other functions, including:

• exercising control over the activities of other banks;
• regulation of commercial banks;
• development of government measures in the field of credit and monetary policy and ensuring their implementation;
• control of money circulation throughout the state, as well as its emission;
• conducting research of a scientific nature in the field of the banking system;
• determination of the main priorities and directions of the monetary policy pursued in the country;
• setting economic type limits for other banks operating in the country.

The Central Bank of the Russian Federation also plays a certain role of "the last credit authority".

As for commercial banks, these are all those credit institutions that carry out a certain list of operations for legal andindividuals. Among their main actions, it is certainly worth highlighting intermediary operations, payment and settlement, granting loans, attracting deposits, actions in the securities market, etc.

Non-commercial banks provide a certain list of services, among which it is worth noting:

• exit to Forex and Stock market;
• car loans;
• mortgage;
• lending to organizations and individuals;
• carrying out all operations with precious metals;
• exchange of damaged banknotes for unspoiled ones;
• maintaining accounts of economic entities.

Specialized and universal banks

Considering the peculiarities of the legal status of credit institutions and the concept of this system, it is certainly worth highlighting the fact that, depending on the nature of the operations performed, banks operating in Russia are divided into universal and specialized. Consider the features of these groups.

Specialized banks are financial institutions that serve only a certain group of the population or a specific industry. Vivid examples of these are those banks that provide services exclusively to medium or small businesses.

Dwelling on a more detailed consideration of the issue of specialization of banks, it is worth noting that it can be of several types:

• client (utilities, consumer loans, exchange);
• territorial (international, interregional and regional);
• functional (legal savings, mortgage, clearing, deposit, innovation, investment);
• industry (industrial, foreign trade, construction, energy, social development).

As for universal banks, they carry out all types of operations and with all circles of people. Their activity is not determined by a certain economic branch, range of clients, their composition, business area or types of activity.

National, foreign and joint banks

Looking at what authorized capital the bank has, it can be attributed to the group of joint, foreign and national ones. Consider the features of the legal status of credit institutions of these types below.

By the way, the banking system of the Russian Federation currently has the overwhelming majority of national banks. They are created exclusively on the basis of Russian capital and are the main conductors of the monetary policy pursued in the country. That is why it is worth noting that the effective operation of this group of banks is the key to the normal functioning of the monetary economy of the entire state.

As for foreign banks, the creation of their capital is based primarily on the funds of other states. The main difference between foreign banks is that they are officially registered on the territory of another country, while in Russia they are active only through direct participation in the authorized capital of credit institutions of a group of residents. Also theyconduct their activities by creating branches and subsidiaries. It should be noted that in the territory of the Russian Federation this type of activity is possible only with the permission of the Central Bank of the country.

Speaking of joint banks, it is worth noting that the basis of their authorized capital is formed from Russian funds, but in addition to them, it also contains a share of foreign funds.

Non-bank credit organizations

As for the peculiarities of the provisions of a non-banking type credit institution, first of all, it is worth noting that their legal status allows only certain financial transactions, and not all those that are presented in the general complex. Permissible combinations of functions for individual non-banking organizations can only be established by the Central Bank.

What structures are included in the group of non-banking organizations? Among the most prominent representatives of these, it is worth highlighting clearing institutions and those that are working on the implementation of settlements in the securities market. As for the classification of this type of organization, they are divided into:

• non-banking credit organizations of collection;
• settlement non-banking organizations;
• structures that carry out credit and deposit operations.

Let's consider further the features of each of the presented types of non-bank credit institutions, their legal status and operations that are allowed for execution.

Cash collection organizations

As for non-bank credit organizations of collection, it is first of all worth notingthat they can be created solely on the basis of a license issued by the Central Bank. On the basis of this document, the organization in question has the right to issue bills of exchange, settlement, and payment documents. It should be noted that currently there are only two cash collection organizations in the Russian Federation. Of their total number, the ROSINKAS structure, established in 1988, is considered the most in demand. It is her services that the country's banks most often use.

Settlement organizations

It is worth noting that the legal status of a non-bank credit organization of the settlement type provides for a fairly wide range of opportunities and great functionality. Of great importance is the fact that these structures are actively engaged in servicing not only legal entities, but also other credit-type structures operating in the securities market, as well as in the foreign exchange and interbank system.

Legal status of non-bank credit institutions of settlement type can perform the following operations:

• opening bank accounts for both individuals and legal entities, as well as their subsequent maintenance;
• settlements on individual orders given by legal entities;
• purchase and sale of foreign currency by bank transfer;
• providing loans to your customers.

In addition to all of the above, organizations of the type in question have the full right to carry out all the same functions as cash collection.

Speaking about the legal status of settlement organizations, it is worth noting thatthat they are accountable to the Central Bank and, moreover, they regulate their activities.

Deposit and credit institutions

Speaking about the legal status of deposit and credit organizations operating in the Russian Federation, it is worth noting that their main action is aimed at executing a separate group of banking operations and only on the basis of a license issued by the Central Bank of the Russian Federation.

The general concept of this type of credit institutions, their legal status and operations that can be performed, are spelled out in the provisions of the Federal Law "On Banks and Banking". They say that deposit and credit organizations have the right to perform the following functions:

• attracting funds from depositors (for a certain period);
• issuance of bank guarantees;
• placement of attracted funds not only on its own behalf, but also at its own expense;
• sale and purchase of foreign currency (exclusively in non-cash form).

Based on the rules established by law, deposit and credit structures can only open correspondent accounts for an active balance account number 301 ("Correspondent Accounts"). It is worth noting that the Central Bank maintains strict control over the activities of the organizations in question and establishes certain standards for them.

Legal capacity of organizations

It is worth noting that credit organizations of both banking and non-banking types, regardless of their type, must have legal capacity. Consider further the features of this concept.

Speaking of organizational legal capacity, it should be clarified that this concept has certain characteristics. Among them, signs of banking legal capacity, it is worth highlighting the fact that they are:

• have the right to carry out their activities only if they have a special license;
• can only conduct banking activities;
• have the ability to perform only those actions that are permissible in accordance with the acquired status.

Besides all this, considering the legal capacity of organizations of this type, it is worth noting that no other structure has the right to perform those actions that are vested in banking and non-banking structures. As for the banks themselves, their legal capacity provides for a ban on conducting activities in the field of trade, insurance and production.

The provisions of the Civil Code of the Russian Federation stipulate that credit institutions have legal capacity of a general type. The exception to this rule is for commercial and federal organizations, which have a special type of legal capacity.

On the process of creating a credit institution

Modern legislation establishes a certain procedure for creating credit-type organizations. Let's consider its main stages in more detail.

OnThe first stage is the decision to create an organization. At this stage, the development and adoption of its charter, as well as the signing of the founding agreement. These procedures are carried out on the basis of the provisions contained in the Federal Law "On Banks".

At the initial stage of creating a credit institution, some other documents are required:

• organization business plan;
• documentary confirmation of the sources of funds included in the structure of the authorized capital, as well as the legality of their origin;
• document confirming the ownership of the building in which the office of the organization will be located, as well as its certified copy;
• a package of documents required for the preparation of a special inspection commission;
• conclusion regarding the approval of the issue of establishing a credit type organization and its compliance with the rules established by the antimonopoly policy (issued by the federal antimonopoly authority);
• questionnaires for senior positions in the future organization.

At the next stage of the creation of the organization, the process of formation of its authorized capital takes place. It is made up of the contributions of all participants included in it. It is worth noting that it is the total amount of the authorized capital that determines the minimum amount of all property that can guarantee the interests of its creditors. The financial position of a credit institution can be determined both in national currency and in foreign currency. In addition, an indicator of financial position can be determined by propertyorganization, as well as the buildings in which its branches (if any) and the main office are located.

Next is the registration and licensing procedure, after which the workflow begins.

About credit risk

When considering the legal status of banking and non-banking credit institutions, it is certainly worth noting that each of them has the ability to bear credit risk. What it is? Let us further consider the concept of this type of risk, as well as its main features.

The provision "On the credit risk of credit organizations" says that the structures in question may suffer some material damage in a situation where the borrower is unable to repay the amount of loans taken within the agreed period, observing all the indicated conditions. Such risks can be external and internal and, moreover, may vary depending on the amount of damage caused.

In order to avoid bankruptcy as a result of large losses, the legislation provides for the need to create special reserves for organizations of this type. This is done on the basis of the regulation "On the procedure for the formation of reserves by credit institutions", which spells out clear ways to create a fund, as well as methods for extracting funds from them.

Such reserves are formed for those balance sheet assets that have a certain risk of incurring losses. Based on the regulation "On the required reserves of credit institutions", this type of reserves cannot be formed in relation to:

• sCentral Banks of developed countries;
• loans and those debts that are equivalent to them;
• payments made in advance for the provision of a particular service;
• investments in those securities that were purchased under loan agreements.

In addition to all of the above, the reserve fund is not formed in relation to transactions conducted with the Central Bank of the Russian Federation.

The regulation "On the required reserves of credit organizations" states that the possible losses of organizations include:

• an increase in her expenses compared to the data presented in accounting;
• reducing the price set for the organization's assets;
• failure to fulfill obligations by the counterparty.

As practice shows, of all the above risks, banks most often have to deal with default by the responsible party.

Based on the norms contained in the regulation "On the procedure for the provision of funds by credit institutions and their return", all risks incurred must be taken into account in accounting without fail.

About licensing features

It is worth noting that absolutely all credit-type organizations must go through the licensing procedure. This is due to the fact that the presence of this particular permit determines the legal status of credit institutions in the Russian Federation.

Production of this procedure is carried out only afterregistration of the structure at the state level. It is carried out exclusively by the Central Bank of Russia.

It is also necessary to take into account the fact that it is in the content of the license that a list of the functions that the organization can perform, as well as a list of those foreign currencies with which it has the right to perform them, is given.