Who lends
The external debt of the state is funds borrowed from foreign banks, financial companies, funds, and institutions. As a rule, they are used to cover the budget deficit, replenish the gold and foreign exchange reserves, and finance other national events.
External debt consists of financial obligations incurred to the following creditors:
- Countries that are not members of the Paris Club.
- Multilateral participants.
- Member states of the Council for Economic Cooperation.
- Partner countries that issued bonds for the purpose of subsequently receiving loan funds.
What is the total amount of debt made up of?
The amount of Russia's external debt in 2020 is determined by:
- state obligations in foreign currency;
- liabilities in securities;
- external debt of the Central District Hospital;
- banking sector debts.
Structure of the external debt of the Russian Federation as of November 1, 2019
In the last two years, there has been a decrease in all items, with the exception of liabilities in foreign currency. However, experts predict a peak in payments next year.
Due to which the number of banks in Russia is decreasing
There are three situations when a bank ceases to exist:
- license revocation;
- its cancellation;
- reorganization.
The first case is forced closure. The regulator is running. The reasons for such a decision can be very different. Starting from protecting the interests of depositors and creditors, ending with systematic violations of legislative norms by a financial institution.
Cancellation of a license is also carried out by the Central Bank. True, on the credit institution’s own initiative. Its management and owners decide to cease operations. What the Central Bank of the Russian Federation is notified about. Based on this statement, the license is revoked.
Reorganization is a more versatile concept. The most common form is the merger of one bank with another. After this, only one commercial structure remains. This format of market reduction has been gaining popularity in recent years.
For example, during the period under review, we can recall two cases when large financial institutions merged. The first – VTB24 and VTB Bank of Moscow joined VTB Bank. The second – FC Otkritie Bank absorbed B&N Bank. The listed credit institutions were among the TOP 50 largest market representatives.
Sources:
Central Bank of the Russian Federation - link.
about the author
Dmitry Sysoev - higher education in economics from Sumy National Agrarian University with a degree in Organization Management. Analyst of the banking sector and microfinance market. Experience working in specialized commercial structures - both banks and microfinance organizations. For more than 5 years, he has been creating useful content for consumers of financial services and organizations - information and analytical articles on the banking sector and the microfinance market. [email protected]
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Will the peak be passed?
According to information published on the official website of the Ministry of Finance of the Russian Federation and in accordance with the external debt repayment schedule, in the period from 2020 to 2024 the state plans to spend $13 billion for these purposes. Of these, 5.6 billion will fall in 2020 – that’s almost 40%. By the end of next year, the payment peak will be passed. In addition, the Russian Federation has an official debt to bilateral and multilateral creditors in the amount of $956 million. In the next 4 years, the government plans to repay 80% of this amount.
Also, foreign currency allocations are included in the federal budget for the implementation of state guarantees. In 2020 they amount to $46.5 million.
How many operating banks are there in Russia today in 2020?
It is quite simple to calculate the number of operating credit institutions in Russia on any day in 2020. For this purpose, the information that the Central Bank publishes on its website is used.
Based on official information, in Russia as of today 2020 there are 378 operating banks .
This figure was obtained based on the following data:
- As of September 1 of this year, there were 378 credit institutions (the latest data on the website of the Central Bank of the Russian Federation);
- Over the past part of September, not a single credit institution left the market. Neither through revocation nor through cancellation of the license.
Accordingly, there is no need to subtract structures from the total number of financial institutions recorded on the first day of September. Thus, there are currently 378 credit institutions operating in Russia.
This number includes all banks – both with a universal and basic license. At the same time, it does not take into account other market players. We are talking about non-bank credit organizations (NPOs). There are 40 of them.
Causes
Officials explain the current situation by economic instability, which depreciates the national currency and causes a budget deficit. Inflation is followed by an increase in the cost of all major product groups and a deterioration in the well-being of the population. Economic sanctions imposed on the Russian Federation, which have limited the access of the Central Bank and other large financial institutions to borrowed funds, are also having an impact. Sanctions had a negative impact on the country’s investment attractiveness and export volumes, which also affected the economy.
Yet there are benefits to limitations. In 2014, when the political situation became tense, the number of transactions opened for external loans decreased sharply. As a result, the total amount of payments decreased – the rapid return of capital to the country began. In less than a year, the Russian authorities managed to return a record amount - about 100 billion in American currency. This happened just before the next round of the economic crisis in 2015. As a result, the ruble devalued.
Dynamics of decrease in the number of banks in Russia for 2015-2019
The beginning of the global purge of the domestic banking sector dates back to mid-2013. Here, the five previous years before the publication of the material were taken for analysis. Therefore, 2014 does not appear in the chart.
At the same time, it can be mentioned. As of January 1, 2014, there were 859 banks operating. On the first day of 2020, there were 783 left. That is, the market has decreased by 76 players over 12 months. This is a significant indicator. For comparison, in the previous year the sector decreased by 38 participants. This is almost twice less than in the period under review.
Over the past 5 years, the market has decreased by 381 representatives. That's almost half the players. To be more precise – 48.7%. Taking into account the additional year 2014, the indicators are even more global. In this case, the core financial sector decreased by 53.2%.
The vast majority of cases are revoked licenses. Over the previous 5 years, 314 banks were forcibly closed. Another 67 commercial structures ceased to exist on their own initiative. Through cancellation of a license or reorganization in the form of merger with another market participant.
The maximum contraction activity in the banking sector was recorded in the first two years of its purge. That is, in 2020 and 2016. In each period, slightly more than a hundred credit institutions ceased to exist.
Comparable rates of decline in the number of financial institutions were recorded only during the 1998 default. During its 12 months, more than two hundred banks were closed. In the next year, 124 credit institutions were forced to close.
Every cloud has a silver lining
This saying applies to Western economic sanctions, as a result of which Russia is deprived or limited in access to borrowed funds.
The situation was also reflected in the amount of external debt obligations - they decreased. According to official data from the Ministry of Finance, over the past three years there has been a steady trend toward a reduction in the amount of financial obligations. This can be seen as an adaptation of the national economy to existing realities and a course to overcome the crisis. However, with a decrease in public debt, the situation in certain industries worsens. Some large representatives of private business are going through hard times, other market participants went bankrupt or were forced to curtail production for other reasons. The Russian Federation's own funds are not enough to fully cover the budget deficit and repay previously received loans. Given the current state of affairs, it is impossible to refuse external lending; accordingly, there is no need to talk about reducing existing debts and completely repaying them in the near future.
Read online “How much is debt worth” by Pogodin Radiy Petrovich – RuLit – Page 1
Radiy Petrovich Pogodin
How much is the debt worth?
The land here is desolate. Rocks. Trees crippled by frost are huddling together. They don't squeak in the wind or complain. They are silent, stubborn and firm. The Polar Sea spreads wet sails of fog in the hills.
Ice. Night. Blue snow.
People with sad souls cannot stand here for more than a year. Their hearts will be wet from the rain, shriveled from the frost, from fear. Forgetting honor, forgetting their comrades, they run back to the cities where the walls are covered with a hundred layers of wallpaper. But we won't talk about them. We'll talk about funny guys and girls. About good weather and the boy Pavlukh.
It was the end of May. The night flew to the other pole.
The day shift was on its way home. The evening hurried to work. The village canteen was crowded with goulash and steak lovers. The local residents never complained about their appetite, and if you hear from a person: “I don’t want to eat something,” it means that he simply does not have money.
In the red corners of the dormitories, capricious radios were already wheezing. Boiled jets of water hit the white bathtubs of family apartments. Those who considered sleep to be the highest good were already looking at their bed, preparing, as they say here, to press down the pillow.
At that hour a boy appeared in the village.
His furry hat seemed to have jumped out of a dog fight and had not yet had time to lick its wounds. A padded jacket with a yellow seal collar spotted with spots was fastened with four chipped buttons from a lady's coat. Huge fisherman's shoe covers reached the boy's groins. It was as if he had saddled them and rode slowly through the mud, trusting his fate to the shoe covers. The damp, sticky wind polished the boy’s cheeks to a red shine.
The village had no boys of its own, except, of course, for the smallest babies that were recently born to the local newlyweds. These kids didn’t even know themselves whether they were boys or girls. This was known only to their parents and the nannies in the nursery.
The first to see the strange boy was excavator operator Romka Pankevich. True, few people called him Romka anymore. It is indecent to call a married man Romka, even though you studied with him at a craft school, saved money together for your first woolen suit, slept in a tent on the same bed, covered with two blankets and two padded jackets. Soon Roman will graduate from the All-Union Industrial Institute and everyone will begin to call him Roman Adamovich.
Roman looked at the boy simply out of curiosity.
By his tired face, by his legs that barely moved, he guessed that the boy had come from afar. From the eyes that shone stubbornly, from the stern wrinkle between the eyebrows, Roman realized that the boy was ready to walk just as far if necessary.
Distant memories stung Roman. It suddenly seemed to him that it was he himself, wet and hungry, wandering through the mud into his unknown life. Roman shook his head. Said:
- Shoo, fall apart.
The boy stopped.
- Are you drunk? - the shaggy hat boomed in a cold voice. How can I get to the authorities here?
- They go to the authorities with their feet, and - mind you - very rarely of their own free will. - Roman was probably thinking about something completely different, because he stepped off the porch into the mud, not sparing his polished shoes. He looked at the stranger for a long time, rubbing his blue, shaved cheek.
The heavy shoe covers moved two steps forward.
“If you can’t tell, then don’t block the road,” their owner grumbled angrily.
The boy's voice was muffled; Behind the stubborn shine of the eyes, fear and anxiety lurked. Roman was very familiar with all this. The novel did not leave the road. He said:
“Don’t beep, I can send you to the police.”
Roman waited to see how the boy would respond to his words. But the shoe covers continued to move, and the boy’s eyes did not change their expression at all. Then Roman grabbed the boy by the seal collar, pulled him out of the mud along with his shoe covers and put him on a stand near the house.
- Let's talk... What business do you have with your boss?
- Don't grab it! - the boy kicked. - You’ll tear off the collar... L-let me go, I say!
Roman pushed the boy into the hallway and pressed him against the steam heating radiator.
- Wait a little, then we’ll move on. Maybe we can get to the authorities with you.
Roman's build matched his car - a six-cc excavator. Muscles bulged like cobblestones under his flannel jacket.
“You don’t have every right to detain me,” said the boy.
- And you don’t have every right to walk around in the border zone. Show me your documents!
The boy put one shoe cover forward and tapped his toe on the floor.
“Ha,” he said. - Found a smart one. First, show me your documents.
The boy screamed desperately and stuttered.
Roman slapped him on the shaggy hat. To dispel mutual suspicions, he took the boy with one hand by the padded jacket, just below the collar, with the other hand by the pants, just below the padded jacket, and carried him to the second floor.
The boy hit the excavator operator’s legs with his fists and touched the iron railing posts with his shoe covers. The railings were humming. The boy screamed:
- Let go, you've been told!
Roman shook him:
- It will be, well, it will already be. Exactly small.
On the second floor landing, Roman knocked on the door and, when it opened, dragged the boy into the apartment.
“Anya, look what I brought,” he said to the little frightened woman. - At least tell me what your name is.
- Well, Pavlukha. Why are you bothered?
Anya winced.
- Don't drag him into the room, please. Dirt pours from it in streams. She walked up to Pavlukha, unceremoniously took him by the chin and turned him towards the light.
Pavlukha aimed to head-butt her in the stomach and immediately flew into the corner, rattling his heavy boots.
“Don’t touch Anya,” said Roman. - We are waiting for our son.
- Well, go look for your snotty son. Let me go. I didn't come to you, okay?
Roman waited until Pavlukha got up from the floor, then pushed him towards the bathroom.
“We don’t need to look for our son.” He just wasn't born yet. Therefore, don’t even think about fighting with Anya. Take off your robe, I’ll take it to the dryer later.
Roman himself pulled the hat off Pavlukhina’s head and suddenly asked a question that you don’t often hear these days:
—Your hair doesn’t move?
- Why would they move?
- How - from what? From snipes. The insects are so small, they move their legs... - Probably, Roman again remembered some distant, past years.
Pavlukha blushed and pulled his upper lip to his nose.
- Don't talk nonsense. I went to the bathhouse before the road.
- Look, you can wash yourself in the bath.
Anya winced again and looked questioningly at her husband.
Roman took off his ski jacket and rolled up the sleeves of his red-checked cowboy shirt.
Pavlukha glanced sideways at his hands and sighed:
- I’ve accumulated strength...
“I saved up,” agreed Roman. - Anya, please go and call Zina. I'll watch him here.
- Why did you bring him to us? - Anya said dissatisfied. - He’s still being rude. The police need him. Maybe he's a crook.
“Call Zina,” Roman repeated quietly.
Anya threw a down scarf over her shoulders and walked out, looking unfriendly at Pavlukha.
“You shouldn’t be leaving,” Pavlukha said after her. - Look, I’ll steal everything from you...
- You don't bay. “Take off your quilted jacket,” Roman commanded. - Come on, come on, Pavlukha, move... You and I have left a legacy here. “Roman brought a rag, wiped the floor and pushed the boy into the kitchen, to a table covered with blue oilcloth.
Current situation
The instability of commodity markets, political fluctuations, and other objective factors do not allow us to absolutely accurately predict the amount of public debt in 2020 and payments for its repayment and servicing. Developments will largely depend on the cost of energy resources and the volume of their exports. Experts agree on one thing: in the near future we will not be able to do without credit funds. The question is, which country will want to lend to the Russian Federation on acceptable terms and in the required amounts? And will he want to? Stabilization of the situation is possible with an increase in the price of oil, gas, and petroleum products - the main Russian export. This will strengthen the national currency and have a positive impact on the investment climate.
