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Banking. Organization by the Central Bank of cash circulation in the Russian Federation (lecture notes)

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Organization by the Central Bank of cash circulation in the Russian Federation

Function of issuing money and organizing money circulation. The issue of money is a monopoly right of the Central Bank and is solely within its competence. CBs do not have the right to independently issue funds into circulation. The need to issue new money is determined by the realization of national income or the newly created value of the total social product. Money is issued in amounts approved by the Council of Ministers of the Russian Federation and distributed in accordance with the intended purposes.

The issue of money is the main source of funds of the Central Bank, used to advance expanded reproduction. The issue of money is carried out in two forms: bank turnover money when lending to commercial banks; cash, providing cash transactions for servicing the national economy and budget.

When lending to commercial banks, the funds of the Central Bank are credited to their accounts in cash settlement centers (RCC). Bank operations related to the issuance of cash to enterprises and organizations are carried out on the basis of cash requests from customers. These applications are submitted to servicing banks and contain all the necessary data on upcoming cash transactions.

Based on the cash applications of enterprises, forecasts of cash turnover of commercial banks are compiled. The income part of these programs is calculated based on the receipt of cash at the cash desks of banks. The receipt of money is organized with the help of collection (delivery to the bank) of cash in trade and purchasing structures, public catering establishments, transport systems and other bodies providing paid services to the population. The expenditure part is forecasted on the basis of forthcoming wage payments and other expenses of enterprises, institutions and organizations.

The amount of money in circulation depends on the ratio of the incoming and outgoing parts of the bank's cash programs. With the growth of entrepreneurial activity, there is a constant excess of the expenditure side of the program over the income and the release of new funds into circulation (Shevchuk D.A., Shevchuk V.A. Money. Credit. Banks. A course of lectures in a concise presentation: Teaching method. Aid. - M: Finance and statistics, 2006).

Author: Shevchuk D.A.

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