In the everyday life Russians prefer to use cash. And this is quite understandable: it’s a pleasure for the people to be paid with notes for work and immediately hide them into the wallet. But it is often more convenient and cheaper in the present-day economic situation to make cashless settlements; and this concerns not only large companies. The Russian population is gradually getting used to the fact that money can be not only in cash, but also can be transferred to plastic cards or bank accounts. Finally, it is habitual already in this country that you can be paid with a cheque for your work. And the government stands up for the increase of cashless statements in money circulation; this is at least what the government says. But sometimes governmental authorities can do something extraordinary that disagrees with the logic of the officially declared line.
Such problems certainly don’t concern average citizens. At present, the number of companies and businessmen accepting payments in cheques is increasing. At that, it’s not a problem for them that sometimes it may take not 1.5-2 hours, but even a couple of months to cash checks. It’s more important to know that money has been transferred; until recently, even bank clients themselves could forecast the fate of this money. However, as it is clear now, people holding non-cashed checks have got into a trouble. Russian banks have ceased to cash checks. This is because the Central Bank issued an instruction according to which checks can be cashed only by authority given by the Central Bank in a written form. In other words, to cash checks or to transfer money paid with a check to your bank account, you need to appeal to the Central Bank, fill lots of bank forms and stand in a long line to get a bank license for a single bank operation. It seems to be quite a problem to get the right to use money that you have already earned and that was paid to you with a cheque.
We often see in movies people put their signatures on checks, set the problem of payments rather quickly with the help of checks. Probably, the very fact that so much problems now arise in connection with cashing of checks is not a big tragedy at all. But money thus frozen on checks may turn to be unpaid salaries, outstanding public utilities bills or taxes. Did Central Bank officials think about the problem when they issued the new instruction? It’s a pity that the new instruction ignores everyday problems of the working population.
The Moscow chief territorial department of the Russian Federation Central Bank issued an explanation to the new regulations. It says: “In accordance with the clause 877 of the Russian Federation Civil Code, a cheque is a security that contains an unconditioned instruction of a cheque holder to a bank to make payment of the sum mentioned in the cheque to this cheque holder. In accordance with the subpoint “b” of the paragraph 4, clause 1 of the RF law # 3615-1 “On currency regulation and currency control” of October 9, 1992, cheques are referred to securities. According to the subpoint “a” of the first clause of the above mentioned law, passing of property and other rights connected with cheques is a currency transaction connected with capital flow. As it is said in the paragraph 2 of the clause 6 of the law, the transaction is conducted in an order fixed by the Central Bank. To execute currency transactions connected with capital flow, RF residents must get a permission (license) of the Bank of Russia, if otherwise is not provided by standard acts of the Bank of Russia.” Unfortunately, there is no other method fixed for this purpose. Some kinds of currency transaction require no license from the Bank of Russia. This is fixed in the item 1.1.20 of the Bank of Russia Statute of April 26, 1996, #39 “On order of execution of some kinds of currency transactions, on accountability of some currency transactions”. In accordance with the regulation, no license is required for “accepting of cheques in foreign currency from non-residents by companies residing in Russia as a donation, endowment or other non-repayable and irretrievable receipts, and presentation of these cheques by companies for payment.”
If we consider the situation thoroughly we see that if a client decides to grant a cheque with a sum in foreign currency to a bank, the bank will have no problems with licenses for cashing of the cheque. However, if some enterprise pays with a cheque in foreign currency for services or for some work you’ve done, the Central Bank automatically applies to you the same requirements it does to a currency exchange office and demands that you should get a special license to cash the cheque. But it may happen in fact that getting such a license may be more expensive than a sum paid to you with the cheque. Will this cheque be worthy cashing then?
Objectives the Central Bank pursues by the innovation can be rather logic, and reasons for introduction of the innovation may be very serious. It is not ruled out that the Central Bank had to restrict uncontrolled circulation of currency cheques for natural persons because companies issue currency cheques for payments too often. As of now, many people have currency cheques in possession, but these cheques are practically of no value without special procedures at the Central Bank. In many cases it turns out that people got worthless papers as payment for work they did.
So, the Central Bank easily achieved the objective it outlined for itself. Since now, it is highly likely that people won’t agree to accept cheques for payment for some work or services; they will prefer to get money in cash, in foreign currency to be more exact. In other words, non-cash money circulation will be reducing once again instead of increasing (as it is desired by the financial authorities for better control). And this is quite logic: people won’t accept cheques as payment for some work or services simply because it is a problem to cash them. It is unlikely that this was the main objective of the Central Bank financiers. Unfortunately, the situation can be characterized with the traditional phrase: “We did the best, you see the rest.”
Kira Poznakhirko PRAVDA.Ru
Translated by Maria Gousseva
Read the original in Russian: https://www.pravda.ru/economics/33769-rosbank/