Topic 1. CONCEPT AND SYSTEM OF BANKING LAW

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The concept of banking law

The question of whether banking law is an independent branch of law can be resolved using the theory of law. In accordance with it, any independent branch of law has its own subject and method of legal regulation.

Banking law is a branch of law that regulates the activities of banks and other credit organizations.

By "banking law" is meant:

▪ firstly, the branch of law;

▪ secondly, science that studies the patterns of construction and functioning of the banking system, legal norms governing banking relations and the practice of their application;

▪ thirdly, an academic discipline that is taught in higher educational institutions.

In Soviet science, banking law was considered as part of financial law, being considered its special sub-branch. The tradition of considering banking law as a sub-branch of financial law has been preserved to this day.

Banking topics are considered in textbooks on financial law, starting with the topic "Legal status of banks" and ending with the topics "Settlement legal relations", "Securities.

On the other hand, banking law is part of civil law. Many issues are regulated precisely by the norms of civil law.

It can be said that banking law has its own subject of legal regulation - social relations that arise in the field of interaction between banking and other credit organizations.

Banking law regulates, firstly, the banking system, headed by the Bank of Russia, and, secondly, banking activities. Accordingly, the banking system, banking activities and banking relations are the subject of legal regulation for banking law.

The method of legal regulation in the theory of law is usually understood as a set of methods and means of legal regulation, which are due to the laws of the subject of legal regulation and are applied in a particular branch of law. There are three essential elements that make up the method of legal regulation:

a) the grounds for the emergence of rights and obligations and the nature of their relationship;

b) the method of forming the content of rights and obligations;

c) the nature of the sanctions, as well as the methods and procedures for their application; It can be said about the sanctions of banking law that they create the most characteristic difference between banking law and all other branches of law.

Banking law uses such methods as imperative and dispositive.

The relations of power and subordination are regulated by the imperative or administrative-legal method. This method assumes that one of the parties to the legal relationship has the right to give mandatory orders to the other party. This method is used, for example, in relations between the Central Bank and other elements of the banking system. The Bank of Russia is vested with power by law, and its orders and individual orders are subject to unconditional execution by all credit institutions. After all, legal entities, being constituted as banks, voluntarily joined the system of monetary power, which is represented by the banking system headed by the Bank of Russia. The Bank of Russia is the regulator and supervisory institution of this system, and its power extends only to those entities (credit institutions) that, by law, become subjects of the banking system, in contrast to state power, which extends to all entities in society.

The second method, dispositive or civil law, implies equality for the participants in legal relations and the opportunity to choose a variant of behavior at their own discretion, depending on specific circumstances. This method regulates, mainly, the relationship between commercial banks and their clients.

It is necessary to see the differences between civil and banking law in order to correctly determine the limits of the competence and functions of the Bank of Russia in resolving issues of licensing, supervision, etc.

Thus, we can conclude that banking law does not have its own method of legal regulation.

Banking law refers to the so-called complex branches of law, which combine elements of several other branches.

The essence of banking law

The essence of banking law lies in the fact that it regulates banking relations. These relationships arise, change and terminate in connection with the implementation of banking activities.

The essence of law is manifested in its regulatory and protective functions.

They can be considered as the main areas of influence of law on social relations. In the sphere of private relations, regulation is of the most general nature. There is no vertical structure here, no hierarchy built on the basis of public authority. A classic example of such relations is civil law relations. Another thing is when it comes to public law relations. These are relations that are, as it were, constructed by the state.

Private relations are the sphere of relations where the subjects (in this case, the subjects of monetary relations) themselves determine their rights and obligations within the framework of the law. Take, for example, a bank account agreement. There are two sides here - the bank and the client. Everything is decided by the agreement of interests and will of the parties. The Central Bank should not interfere in these relations, prescribe something to the parties in their contractual relations. This is the area, as noted above, of civil, not banking law. Civil law is dispositive - the parties themselves determine their rights and obligations within the framework of civil law.

In these relations, the parties are equal to each other. Such equality means the absence of administrative or other managerial power of one party in relation to the other. Only economic, monetary power, regulated by the parties, can be present here. The government does not interfere in these specific monetary relations. It's like a horizontal relationship.

At the same time, the bank is entrusted with certain obligations to conduct banking operations in accordance with the rules established by law and regulations of the Bank of Russia. Corresponding to these duties are the rights of the Bank of Russia to demand the fulfillment of these duties. There is power in these relationships. Therefore, such relationships can be schematically represented as vertical.

banking law system

The question of the system of banking law is of theoretical and practical importance. The theoretical significance of this issue lies in the fact that the study of the system of banking law allows you to better understand the meaning of the regulation of certain banking operations and transactions, interpret the meaning of the rules, and also distinguish between banking law and other branches of law that regulate banking.

The general concepts of the system of law, sub-branch, legal institution, rules of law, developed in the theory of law and the state, are quite applicable in banking law.

The system of banking law includes three levels:

a) sub-branches of banking law;

b) legal institutions (sectoral and intersectoral);

c) norms of banking law.

An example of a sub-sector is currency law to the extent that it is regulated by the relevant banking laws and regulations of the Bank of Russia.

The institution of banking law is a set of legal norms that regulate interconnected banking relations of a certain type. Banking law consists of such institutions as, for example, the banking system, the legal status of a credit institution, the legal status of the Bank of Russia, prudential regulation, prudential supervision, legal regulation of accounting in a credit institution, opening and maintaining a bank account, settlements, cash transactions, foreign exchange transactions , currency control, operations on bank deposits, operations on loans, operations with precious metals and some others.

Features of the norms of banking law

The norms of banking law are a kind of legal norms. They have all the features that are characteristic of any legal norm. Law consists of legal norms, therefore all signs of law are at the same time signs of a legal norm.

Signs that are inherent in the rule of law as a single legal phenomenon:

a) the rule of law - an abstract rule of conduct;

b) the requirements of the legal norm are addressed to personally unidentified persons (to any banker, to any creditor, to any depositor, etc.);

c) the rule of law is designed for repeated application;

d) the rule of law has a grant-binding character (provides for the rights and obligations of the subjects of legal relations).

If, in view of the foregoing, we analyze the specifics of the norms of banking law, we can note the following.

Banking relations are regulated not only by the norms of banking law proper, but also by the norms that are systemically related to banking law - constitutional, civil, administrative, financial and tax law.

For example, the norms of constitutional law that govern the procedure for appointing the Chairman of the Bank of Russia and the Board of Directors are both the norms of both constitutional and banking law. Another example of Art. 140 of the Civil Code of the Russian Federation. It establishes the basis of the monetary system - the monetary unit as a legal tender. This norm, being a norm of civil law, is at the same time a norm of banking law.

So, we can conclude that the norm of banking law has the following main features:

▪ formally defined nature of the banking rule (contained in the regulatory act);

▪ provides for the rights and obligations of subjects of banking relations;

▪ provided with the possibility of applying sanctions;

▪ establishes the legal status of subjects of banking relations and provides for certain options for their behavior;

▪ volitional content;

▪ rule of conduct;

▪ consolidates typical banking relationships;

▪ addressed to a personally indefinite range of subjects of banking legal relations;

▪ designed for repeated use.

Banking law can be classified on various grounds.

According to the way the rule of conduct is formulated, all norms are divided into authorizing, obliging, restricting and prohibiting.

According to the functions of law, the rules of law can be divided into two groups: regulatory and protective. Both types of norms are applied in different proportions in banking law, depending on the nature and type of banking activity.

By appointment, the norms of banking law are divided into general and prudential.

The general norms of banking law fix the legal status of the banking system, the legal status, organizational and legal forms and the procedure for creating credit institutions, their banking activities. The same norms regulate the banking system, the legal status of a credit institution, the goals, legal status, structure and functions of the Bank of Russia, the procedure for organizing and exercising banking supervision, and the procedure for conducting banking operations.

Prudential norms of banking law provide for various financial and organizational measures, the implementation of which leads to a reduction in banking risks.

Prudential standards are all those standards and mandatory requirements that are established by law and the Bank of Russia for credit institutions in order to ensure reliability, liquidity and solvency, manage banking risks, and protect the interests of shareholders and depositors.

Instruction of the Bank of Russia dated March 31, 1997 No. 59 “On the application of enforcement measures to credit institutions for violations of prudential norms of activity” [1] states: “Prudent norms of activity are understood as established by the Bank of Russia: the maximum values ​​of risks accepted by credit institutions; norms for creation of reserves to ensure the liquidity of credit institutions and cover possible losses; requirements, failure to comply with which may adversely affect the financial position of credit institutions or the possibility of a real assessment of their financial activities, including requirements for accounting, reporting and its publication in the open press in cases established by banking legislation, the submission of audit reports and during the registration, licensing and expansion of the activities of credit institutions."

The Decree of the Government of the Russian Federation of July 20, 1998 No. 851 “On approval of the statement of the Government of the Russian Federation and the Central Bank of the Russian Federation on the policy of economic and financial stabilization” predicted that “prudential norms will be tightened.” [2]

Prudential norms are divided into two groups:

a) regulatory prudential norms;

b) protective prudential norms.

Regulatory prudential standards include all those standards that establish requirements for licensing banking activities, for financial standards, for the composition and procedure for reporting credit institutions to the Bank of Russia.

Protective prudential norms include those norms that provide for the grounds, procedure and forms for the implementation of banking supervision. The second group also includes all the rules that regulate the activities of the supervisory divisions of the Bank of Russia.

Protective norms, in turn, should be divided into two groups:

a) material;

b) procedural (procedural).

Substantive norms refer to the so-called substantive law, and procedural norms to procedural law (in the legal literature on the theory of law, there is an opinion that all law is divided into substantive and procedural).

An example of substantive norms can be the norms of banking legislation that provide for the goals, objectives and functions of banking supervision, grounds for liability, types of sanctions that can be applied to credit institutions. These rules affect the significant civil law interests of credit institutions and their founders (participants), and indirectly - creditors and depositors. Therefore, the norms of substantive banking law are established by federal laws. For example, the total amount of a fine that can be imposed on a credit institution is established by federal law.

In contrast, procedural rules are usually set by the Bank of Russia. For example, the procedure for collecting a fine from a credit institution that has violated prudential norms is established by Bank of Russia regulations.

The reporting requirements for a credit institution, as well as the reporting procedure itself, are procedural rules that govern the relationship between a credit institution and the supervisory structures of the Bank of Russia. They, like the rules that govern the inspection of credit institutions, belong to the rules of prudential supervision. This is the regulation of procedures for monitoring by the Bank of Russia how credit institutions comply with the requirements of regulatory prudential standards. The procedures for this supervision can be different: documentary supervision, inspections, etc., especially those related to foreign exchange transactions and bank positions.

An example of prudential protective norms of a procedural nature is the Instruction of the Bank of Russia dated February 19, 1996 No. 34 “On the procedure for conducting inspections of credit institutions and their branches by authorized representatives of the Central Bank of the Russian Federation (Bank of Russia).” This Instruction provides for the procedure for inspections that are carried out by groups of Bank of Russia experts with access to credit organizations. Note, however, that taking into account the specifics of the Russian banking system, even these procedural norms could be fundamentally provided for in banking laws. After all, it would seem that purely procedural issues, which in the conditions of stable and established banking practice should not attract attention, in the conditions of the reality that we face, require legislative regulation. Since 1996, the Russian press has repeatedly raised the issue of conflicts during inspections of the largest Russian banks. Given this circumstance, the basic principles for conducting such inspections should be enshrined in federal law.

In connection with the crisis, a relatively new group of protective prudential norms appeared in the banking system. These are rules aimed at preventing bankruptcy.

Federal Law No. 25-FZ of February 1999, 40 “On the insolvency (bankruptcy) of credit organizations” provides not only civil law norms, but also banking law norms that consolidate the powers of the Bank of Russia to financially improve credit organizations and prevent them from violating banking legislation , including violations of the rights of depositors. [3] In particular, in paragraph 2 of Art. 3 of this Federal Law states that “measures to prevent the bankruptcy of credit organizations are carried out when the grounds established by Article 4 of this Federal Law arise. A credit organization, its founders (participants), in the event of the occurrence of these grounds, take necessary and timely measures for financial recovery and ( or) reorganization of a credit organization.

If these grounds arise, the Bank of Russia has the right to require the credit organization to take measures for its financial recovery, reorganization, and also has the right to appoint a temporary administration." These measures apply to the credit organization if it does not repeatedly satisfy the claims of individual creditors over the past six months monetary obligations and (or) does not fulfill the obligation to pay mandatory payments within three days from the date of their fulfillment due to the lack or insufficiency of funds in the correspondent accounts of the credit organization; does not satisfy the claims of individual creditors for monetary obligations and (or) fails to fulfill the obligation to pay obligatory payments within a period exceeding three days from the date of their satisfaction and (or) the date of their execution, due to the absence or insufficiency of funds in the correspondent accounts of the credit organization; allows an absolute decrease in own funds (capital) according to compared to their (his) maximum value achieved over the last 12 months by more than 20 percent while simultaneously violating one of the mandatory standards; violates the standard of adequacy of own funds (capital); violates the current liquidity standard of a credit institution over the last month by more than 10 percent (in accordance with the law, the standards are established by the Bank of Russia). Further, in Art. 4 of the mentioned Federal Law establishes a list of grounds for taking measures to prevent bankruptcy of a credit organization. [4]

All these and other norms established by the Federal Law “On the Insolvency (Bankruptcy) of Credit Institutions” apply to the so-called problem credit organizations.

This Federal Law was adopted in February 1999. Prior to this, only the norms of the Civil Code of the Russian Federation were applied.

Banking law in the system of Russian law

The closest to banking law by the method of legal regulation is administrative law. However, banking law should not be considered as an integral part of administrative law.

The banking system is not part of the state management system, therefore, the interaction of these industries is based on the application of the same method of legal regulation - imperative, and also by the fact that in many banking relations bodies with power take part, which implies inequality of parties as in administrative law.

The connection between banking law and civil law in the sense of regulating banking activities is manifested in the fact that, as already noted, banking norms seem to be built on top of civil law norms and complement them. An example of this could be, say, all the rules relating to legal relations under a bank account agreement, a bank deposit agreement, and settlements. Everywhere in the text (usually at the end of the presentation) of a specific article of the Civil Code of the Russian Federation, instructions are given on banking rules and business customs. So, in Art. 836 of the Civil Code of the Russian Federation, in addition to the previous text, states that “the written form of a bank deposit agreement is considered to be complied with if the deposit is certified by a savings book, savings or deposit certificate, or other document issued by the bank to the depositor that meets the requirements provided for such documents by law, established in accordance with with it banking rules and business customs applied in banking practice.”

With regard to banking rules, the norm of civil law is a reference. In banking law, it becomes blanket. If necessary, it is, as it were, filled with the norms of not civil, but banking law. The latter are subordinate to it in connection with the priority of civil law in matters of regulating relations with a bank deposit.

Banking rules create conditions for the implementation of the requirements of civil law, and not vice versa. They regulate the very service that the bank provides to customers.

The interaction between banking and civil law in the aspect of banking supervision is manifested in the fact that violations of banking law become a legal fact for the emergence of a protective civil law relationship.

So, in paragraph 3 of Art. 874 of the Civil Code of the Russian Federation states that in case of collection settlements in the event of non-execution or improper execution of the client's order, the issuing bank is liable to him on the grounds and in the amount provided for in Chapter 25 of the Code. If non-execution or improper execution of the client's order occurred due to violation of the rules for performing settlement transactions by the executing bank, the responsibility to the client may be assigned to this bank.

The rules of banking operations are established by the laws regulating banking activities and the regulations of the Bank of Russia. Consequently, the criterion for the application of civil liability in these cases are the norms of banking law and the presence or absence of violations of these norms.

The difference between banking and civil law is of practical importance for everyone who in one way or another encounters the work of the Bank of Russia or commercial banks. These differences are often not taken into account in banking legislation, which, in turn, reduces the responsibility of the Bank of Russia for its decisions, and also negates the responsibility of bankers to depositors, shareholders and all other persons who use banking services.

Federal Law No. 25-FZ of 1999 February 40 "On the Insolvency (Bankruptcy) of Credit Institutions" provides that "the head of a credit institution is obliged to apply to the Bank of Russia with a request to take measures to prevent the bankruptcy of a credit institution if its founders ( participants) refused to take part in the implementation of measures for its financial recovery or reorganization, or did not take the appropriate decision within the period provided for in paragraph 3 of this article. Further in paragraph 2 of Art. 12 (“Implementation of measures for the financial rehabilitation of a credit institution at the request of the Bank of Russia”) states that “upon receiving a request from the Bank of Russia for the implementation of measures for the financial rehabilitation of a credit institution, the head of the credit institution is obliged, within five days from the date of receipt of it, to apply to the management bodies of the credit organizations referred to in Clause 1, Article 11 of this Federal Law, with a request for the implementation of measures for the financial rehabilitation of a credit institution or with a request for the reorganization of a credit institution.

Now let's give an example of the differences between banking and civil law, when contradictions arise between procedural law (civil procedural, arbitration procedural, requirements of enforcement proceedings) and banking law that impede the normal procedure for the execution of court decisions.

In other words, there are also contradictions between procedural and banking law, which are based on the same problem of the boundaries of legal regulation in banking law. We can say that the problem of regulation limits in banking law is the problem of the boundaries that outline the powers of the Bank of Russia (Shevchuk D.A. Banking operations. Principles. Control. Profitability. Risks. - M .: GrossMedia: ROSBUH, 2007).

This is a conflict between the norms of banking and civil law, which cannot be combined within the limits of a "complex" legal relationship. In civil law, only the court can decide the dispute between the parties (and, accordingly, the enforcement of judgments).

Civil law relations can be protected in other ways, but this is according to Art. 12 of the Civil Code of the Russian Federation should be directly stated in the law.

Author: Shevchuk D.A.

>> Forward: Sources of banking law (Powers and functions of management bodies. Regulatory acts of the Bank of Russia)

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