Part I statues on Banks and Bank Activities in the Russian Federation

1. 
   Attract deposits and grant credits upon achieving agreement with a borrower;
   
2. 
   Make payments on behalf of customers and bank correspondents and conduct necessary cash-account servicing;
   
3. 
   Open and maintain the accounts of customers and bank-correspondents, including foreign ones;
   
4. 
   Finance capital investments on behalf of the account owners or persons at whose disposal the invested means exist, as well as from funds which belong to the bank itself;
   
5. 
   Issue, purchase, sell and maintain payment documents and securities (checks, letters of credit, bonds, stock, notes and other documents) and perform other operations with them;
   
6. 
   Issue credit references, guarantees and other obligations on behalf of third persons envisaging their realization in money;
   
7. 
   Acquire unpaid debts on the delivery of goods and services, accepting the risks of collecting such claims (factoring);
   
8. 
   Purchase and sale of foreign currency from Russian and foreign juridical and physical persons;
   
9. 
   Purchase and sell in the RF and abroad precious metals, stones and items derived from them;
   
10. 
    Receive and place precious metals into investments and perform other operations with these valuables in accordance with international banking practice;
    
11. 
    Pay and receive money and control securities on behalf of bank customers (trustee operation);
    
12. 
    Pay brokers’ and consulting services and perform leasing operations;
    
13. 
    Carry out other operations and conduct transactions with the permission of the Bank of Russia within its competence.
    

• 
  the name of the bank and its address;
  
• 
  a list of operations carried out by the banks;
  
• 
  the amount of equity capital fund and the reserve, insurance and other funds formed by the bank;
  
• 
  a statement that the bank is a juridical person and operates on a commercial basis;
  
• 
  information about the management of the bank, its structure, the manner of its formation and its functions.
  

1. 
   A petition for the issuance of a license;
   
2. 
   Constituent documents (a constituent agreement, the bank charter and a protocol adopting the charter and appointing the management staff of the bank);
   
3. 
   Economic substantiation;
   
4. 
   Information about the bank managers (the Chairman or Director, Chief Accountant and their deputies).
   

1. 
   By foreign juridical persons:
   

• 
  the decision of a corresponding body of the foreign founder (the participant) authorizing its participation in forming a bank or an affiliated bank within the territory of the RF;
  
• 
  the charter or another document certifying the status of a juridical person and its published balances for the [Three] 3 previous years;
  
• 
  consent in written form of a regulatory body of the country of domicile of the foreign founder authorizing its participation in forming the bank or in opening an affiliated bank within the territory of the RF.
  

2. 
   by physical persons who are foreign citizens:
   

• 
  the confirmation by a Class-A foreign bank (under usual international banking standards) of the solvency of this person;
  
• 
  recommendations of no fewer than two foreign juridical or physical persons whose solvency is well-known.
  

1. 
   the information provided in support of the issuance of a license is false;
   

6. 
   the bank is declared bankrupt.
   

• 
  the minimum amount of equity capital of the bank;
  
• 
  the maximum ratio between the amount of the equity capital of the bank and the sum of its assets, taking into account risk estimation;
  
• 
  indices of the bank’s liquidity;
  
• 
  the minimum amount of compulsory reserves deposited in the Bank of Russia;
  
• 
  the maximum amount for risk per borrower;
  
• 
  the restrictions on the amount of hard currency and exchange rate risks;
  
• 
  restrictions on using deposits for purchasing stock shares of juridical persons.
  

• 
  reorganization of debt;
  
• 
  transfer of operative management to a temporary administration appointed with the participation of the bank-creditor;
  
• 
  reorganization of the borrower;
  
• 
  liquidation of the borrower in accordance with RF legislation, followed by a forced sale of the property held by the bank as security.
  

Active Word and Word Combinations

1. 
   What operations does a bank being a commercial enterprise perform?
   
2. 
   What forms of property are banks founded on?
   
3. 
   What does the banking system of Russia consist of?
   
4. 
   What do banks do to coordinate their activities, protect the interests of their members and carry out joint programs?
   
5. 
   On what basis do banks operate?
   
6. 
   What does the Charter of a bank contain?
   
7. 
   What is the equity capital of a bank composed of?
   
8. 
   What documents are necessary for obtaining a license of the Central Bank to found a bank?
   
9. 
   What funds are banks obliged to have?
   
10. 
    What economic standards established by the Central Bank of Russia must banks observe?
    
11. 
    What do you know about bank confidentiality?
    
12. 
    What organizations may information about operations and accounts be given to?
    
13. 
    On what basis may the monetary recourses and other valuables of citizens placed in banks be sequestered?
    

Part II Banking Business