The banking system of Belarus

The banking system of Belarus is a two-tier system consisting of the National Bank of the Republic of Belarus and of commercial banks. The National Bank is a state agency which is independent of the government and which reports to the President of Belarus. It does not only regulate the functioning of commercial banks by decree, but also holds stakes in some banking institutions.

   The main objectives of the National Bank are protecting the Belarusian rouble and ensuring its stability, developing and strengthening the banking system of the Republic of Belarus and ensuring efficient, reliable, and secure functioning of the payment system.

   The National Bank performs a set of functions. It shall:

– develop the Republic of Belarus Monetary Policy Guidelines;

– issue money and National Bank securities;

– regulate money circulation;

– regulate credit relations;

– act as the lender of last resort;

– carry out foreign exchange regulation;

– serve as a central depositary of government and National Bank securities.

  The second tier of the banking system is represented by commercial banks through which the monetary policy of Belarus is implemented. According to the current legislation the commercial banks enjoy a high degree of independence in choosing the main spheres of their activities. As regards their form, the commercial banks may be both state-ownedand non-state banks set up by founders (legal and physical persons) on a share or contribution basis.

   Banks operating in Belarus fall into two categories. The first one consists of six major banks, five of which were established on the basis of pre-existing Soviet banks: BelarusBank, Belagroprombank, Belinvestbank, Belpromstroybank and Belvneshekonombank and PriorBank, the largest privately-owned banking institution. These banks finance state programs and account for about 90% of all assets in the Belarusian banking sector. So Belarus can be classified as a country with a high share of concentration of banking capital in the group of leading banks. By this indicator Belarus corresponds approximately to such countries as Sweden, the Netherlands, Finland, and Greece.

   All Belarusian banks are universal, i.e., they can make profit by rendering services to their clients and by conducting investment operations. The major part of income of the Belarusian banks is comprised of credit services. The largest Belarusian banks are not distinguished by the types of activity and their profits are rather balanced in nature. However, there are some financial institutions among small and medium banks, whose activities may be considered as highly specialized. The banks with a prevailing share of service fee profits are the International Trade and Investments Bank, Trustbank, the Reconversion and Development Bank, the Belarusian Industrial Bank, Absolutbank, Sombelbank. Another group of banks specializes in currency exchange operations. These are Technobank, BelSwissbank, Golden Taler, International Reserves Bank.

   In February 1993 Belarus set up the Inter-Bank Currency Exchange which is the main instrument of the legal currency market. The trades are performed in four main currencies: US dollar, Euro, Russian ruble and Ukrainian grivna. The National Bank established the official exchange rate of the Belarusian rouble in relation to the US dollar and the Russian rouble twice a week, on Tuesday and Thursday, on the basis of the auction results. The exchange rates for other currencies are set through computations using the exchange rate of the US dollar at the main currency exchanges of the world. At present the country possesses a large network of offices for the exchange of cash currency.

Ex. 1. Match the Russian word combinations with their English equivalents.

A	B
1) двухуровневая система	a) a basis of contribution
2) физическое лицо	b) a legal person
3) юридическое лицо	c) a controlling stake
4) долевой взнос	d) a physical person
5) контрольный пакет акций	e) a two-tier/level system
6) предоставлять услуги	f) the Inter-Bank Currency Exchange
7) межбанковская валютная биржа	g) to render services

Ex. 2.Answer the questions:

1. What are the main objectives of the National Bank of Belarus?

2. What basic functions does the National Bank perform?

3. What two types of commercial banks are there in Belarus?

4. In what way are the commercial banks of Belarus different from those in the USA?

5. What do some of Belarusian banks specialize in?

6. What countries are the key investors in the Belarusian banking system?

7. What is the Inter-Bank Currency Exchange and how does it operate?

Why do you want to work in a bank?

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