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Banks and Finanse

Banking System

The National Banking System is a dynamically and effectively developing sector of the economy, which is formed in accordance with the objectives of socio-economic development and reflects international standards and regulations.

The Banking system of Belarus is one of the most important structures of the market economy.

The banking system of Belarus is a two-level system consisting of the National Bank of the Republic of Belarus and other commercial banks including banks with foreign capital and banking subsidiaries of foreign banks that are registered on the territory of Belarus.

First level:

The National Bank of the Republic of Belarus. It serves as the country`s Central Bank: it carries out the state registration and banks regulation, licensing of banking activities, regulation of credit relations. It develops the Republic of Belarus Monetary Policy Guidelines and pursue, in concert with the Government of the Republic of Belarus, common monetary policy of the Republic of Belarus in the manner prescribed by legislative acts of the Republic of Belarus. It has an exclusively right to issue money.

Since 1992 The National Bank of Belarus cooperates with IMF. Since 1996, it is a member of the Group of Banking Supervisors from Central and Eastern Europe (BSCEE Group), which is the regional structure of the Basel Committee on Banking Supervision, as well as establishes and develops contacts and exchange of information with supervisory authorities of foreign countries.

The second level:

Commercial banks and non-bank financial institutions. As of 1 November 2010, the Belarusian banking system comprised 31 functioning banks. Of these, 25 were foreign-invested. 8 banks were fully foreign-owned.

In 2008, were registered 4 banks, 3 of them were bank-dominated foreign investment: JSC "Belarusian Bank for Small Business (UK, Netherlands, U.S. and other investors), JSC "Zepter Bank (Switzerland), CJSC "TK Bank ( Iran).

Five million euro is the minimum authorized share capital for the registration of a commercial bank is.

In performing its activities, the National Bank shall be guided by the Banking Code of the Republic of Belarus. This legislation establishes the principles of banking, the legal status of the subjects of banking relationships, regulates relations between them, and also determines the order of creation, operation, reorganization and liquidation of banks (non-bank financial institutions). 

The income of the commercial banks are formed as:

  • Interest income – 64,04%
  • Commission income – 24,25%
  • Income on foreign currency transactions – 3,29%
  • Income on securities transactions – 0,18%
  • Dividend income – 0,04%
  • Other income – 8,2%

There are two documents, governing the safety of citizens' savings: The Law of the Republic of Belarus "On Guaranteed Refund of Bank Deposits (deposits) of individuals" and Presidential Decree "On guarantees of safety of funds of individuals, the accounts and ( or) in bank deposits (deposits)».

In accordance with the regulations a new system of deposit guarantee has been created, which is based on the creation of the Agency on reimbursement of bank deposits (deposits) of individuals. Thus, the current system guarantees the confidence that the money of depositors is not wasted. Even if the bank is not able to return deposits to the client, this will do the Agency on reimbursement of deposits. Currently 26 commercial banks are registered at the Agency, all those that can attract deposits from the public.

On the day of creation of the Agency, its capital amounted to only Br 275 billion. It was formed primarily from the guarantee fund, which had been transferred to accounts of the agency, as well as contributions from the Government and National Bank. In the future the capital of the Agency is going to increase up to 5% of all household deposits.

The agency accumulates banks` deposits, on the basis of which is formed the reserve for payment of deposits. Each bank, which has special permission to accept deposits, must be registered at the Agency. To enter the Agency it is necessary to pay an accounting fee. Afterwards, each quarter the banks are required to pay contributions. The agency informs the banks on the ratio between the size of its reserve and the total amount of attracted deposits of individuals. Money that is being accumulated as a result of deductions of banks, the Agency doesn`t just keep on their accounts, and invests in securities of National Bank and the Government.

Nowadays in accordance with the legislation of the Republic of Belarus, there is one hundred percent guarantee of safety of savings regardless of the amount of the deposit.

It is worth emphasizing that in the world today, there are few countries in which the state would guarantee a full refund of deposits. Recently in Austria, Germany, Greece, Ireland and certain other countries there exists one hundred percent guarantee of safety of contributions. These countries include Belarus as well.

The income of the population received from interest on bank deposits according to the Belarusian legislation are exempt from taxation. Income of enterprises from interest on cash balance on current accounts is recorded in the accounting as a non-operating income and taxed as ordinary revenue in the prescribed manner.

To the latest news of the banking sector include the planned government sale of 25% + 1 share in the authorized capital of JSC “Paritetbank”. The European Bank for Reconstruction and Development is considered to be a potential buyer.

As well there is an active preparation of a deal to sell a controlling stake “Belinvestbank”. The state wants to find a strategic investor, such as a large European bank. 

Belarusian Stock Market

Basic infrastructure for the development of the stock market in Belarus was created in mid-1990's. Belarusian Currency and Stock Exchange operate in Belarus. The National Bank of Belarus, the Committee on Securities of the Republic of Belarus, the Central Depository of Securities of the Republic of Belarus are responsible for the stock market development. The country has created a powerful information-analytical system that reflects information about the issuers and the securities market, stock news and financial markets of the Republic of Belarus.

One of the main reasons for underdevelopment of the country's stock market is the fact that Belarus is one of the few post-socialist countries, which have not yet been carried out a full-fledged privatization of state property.

The share of public sector in the country's economy is estimated at 60-70%. However, by the opinion of the majority of Belarusian analysts, soon in Belarus will start a large-scale privatization. And the professional securities market participants will finally have opportunity to earn at the national stock market.

Thus, due to the established infrastructure and investment potential of the national economy, there have appeared good prospects for the entry of foreign investors into the strategically important market of the Republic of Belarus, that has favorable geographical position and high level of human capital development.