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    Article 75 of the Constitution of the Russian Federation establishes a special constitutional and legal status of the Central Bank of the Russian Federation and stipulates that it has the exclusive right to issue currency (Part 1), and its main function is to protect the ruble and guarantee its stability (Part 2). The status, objectives, functions and powers of the Central Bank of the Russian Federation are also established by the Federal Law On the Central Bank of the Russian Federation (Bank of Russia) and other federal laws.

Article 3 of the Federal Law On the Central Bank of the Russian Federation (Bank of Russia) stipulates the objectives of the Bank of Russia as follows: protecting the ruble and ensuring its stability, developing and strengthening the banking system of the Russian Federation and guaranteeing the efficient and uninterrupted functioning of the payment system.

A key element of the legal status of the Bank of Russia is the principle of independence, which is manifest, above all, in that the Bank of Russia officiates as a special public and legal institution with an exclusive right to issue currency and manage currency circulation. It is not a government structure and at the same time its powers are from the legal point of view those of a body of the state power, because their exercise may require taking measures of the state coercion. The functions and powers established by the Russian Constitution and the Federal Law on the Central Bank of the Russian Federation (Bank of Russia) are implemented by the Bank of Russia independently from the federal, regional or local bodies of power. The independence of Bank of Russia status is proclaimed in Article 75 of the Russian Constitution and Articles 1 and 2 of the Federal Law on the Central Bank of the Russian Federation (Bank of Russia).

The law-making powers of the Bank of Russia imply its exclusive rights to issue normative acts binding on all federal, regional and local bodies of power and all legal entities and private individuals in so far as they are concerned with issues that fall within its competence under the Federal Law On the Central Bank of the Russian Federation (Bank of Russia) and other federal laws. In compliance with the Constitution of the Russian Federation, the Bank of Russia has no right to initiate legislation, but its participation in the law-making process is guaranteed by the procedure requiring The Bank's of Russia opinion on draft federal laws and federal government resolutions relating to the implementation by the Bank of Russia of its functions.

The Bank of Russia is a legal entity. Its authorised capital and other property are in federal ownership, but at the same time the Bank of Russia has proprietary and financial independence. The powers to own, use and manage The Bank of Russia's property, including international reserves, are exercised by the Bank of Russia only, in accordance with the objectives and using the procedure set by the Federal Law on the Central Bank of the Russian Federation (Bank of Russia). No property owned by the Bank of Russia may be confiscated or encumbered without its consent, unless otherwise is stipulated by the federal law. The financial independence of the Bank of Russia implies that the Bank of Russia makes its expenditures out of its own revenues. The Bank of Russia may defend its interests in court, including international courts, courts of foreign states and courts of arbitration.

The government is not liable for The Bank of Russia's obligations, just as the Bank of Russia is not liable for government obligations, unless they have assumed such obligations or unless the federal laws stipulate otherwise. The Bank of Russia is not liable for the obligations of credit institutions, while credit institutions are not liable for The Bank of Russia's obligations, unless the Bank of Russia or credit institutions have assumed such obligations.

The Bank of Russia is accountable to the State Duma of the Federal Assembly of the Russian Federation, which appoints and dismisses Chairman of the Bank of Russia (upon the request of President of the Russian Federation) and members of the Bank of Russia's Board of Directors (upon the request of The Bank of Russia's Chairman, agreed with President of the Russian Federation); delegates to and recalls from the Bank of Russia National Banking Board State Duma representatives within its quota and also considers the guidelines for the single state monetary policy and the Bank of Russia's annual report and makes decisions on them. Upon the proposal of the Bank of Russia National Banking Board, the State Duma may order an inspection of the financial and other economic activities of the Bank of Russia and its departments and branches by the Audit Chamber of the Russian Federation. In addition, the State Duma holds parliamentary hearings on the activities of the Bank of Russia with participation of its representatives and also hears reports by Bank of Russia Chairman on the activities of the Bank of Russia in the course of discussing the annual report and guidelines for the single state monetary policy.

 

Bank of Russia Functions

    The Bank of Russia performs its functions in compliance with the Constitution of the Russian Federation and the Federal Law On the Central Bank of the Russian Federation (Bank of Russia) and other federal laws. Under Article 75 of the Russian Constitution, the principal function of the Bank of Russia is to protect the ruble and guarantee its stability, while issuing currency is an exclusive right of the Bank of Russia. Under Article 4 of the Federal Law On the Central Bank of the Russian Federation (Bank of Russia), the Bank of Russia performs the following functions:

- elaborates and pursues a single state monetary policy in interaction with the Government of the Russian Federation;

- exercises its exclusive right to issue currency and manages currency circulation;

- acts as the lender of last resort for credit institutions and manages the system of refinancing them;

- sets the rules to effect settlements in the Russian Federation;

- sets the rules to conduct banking operations;

- manages all categories of budget accounts, unless otherwise is stipulated by federal laws, by effecting settlements upon the instruction of authorised bodies of executive power and government extra-budgetary funds responsible for organising budget execution and executing them;

- efficiently manages Bank of Russia international reserves;

- makes decisions on the state registration of credit institutions, issues banking licences to credit institutions and suspends and revokes them;

- supervises the activities of credit institutions and banking groups;

- registers the issue of securities by credit institutions in compliance with federal laws;

- conducts on its own or on the instruction of the Russian Government all kinds of banking operations and other transactions necessary for the fulfilment by the Bank of Russia of its functions;

- organises and implements foreign exchange regulation and foreign exchange control in compliance with federal legislation;

- establishes the procedure for effecting settlements with international organisations, foreign states and also legal entities and private individuals;

- sets the accounting and reporting rules for the Russian banking sector;

- sets and publishes the official exchange rates of foreign currencies against the ruble;

- participates in drafting the Russian balance of payments forecast and organises the compiling of the balance of payments of the Russian Federation;

- establishes the procedure and terms and conditions for the organisation by foreign currency exchanges of operations to buy and sell foreign exchange and issues, suspends and revokes permits granted to currency exchanges to organise operations to buy and sell foreign exchange. (The Bank of Russia will issue, suspend and revoke permits granted to currency exchanges to organise operations to buy and sell foreign exchange once the federal law amending the Federal Law on the Licensing of Individual Kinds of Activity comes into force);

- analyses and makes forecasts on the state of the Russian economy as a whole and by region, especially with regard to monetary, foreign currency, finance and price relationships, and publishes corresponding materials and statistical data;

- performs other functions in pursuance of federal laws.

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