Toward a market-driven economy in Belarus

Iskra Andreeva Aleksoska

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The Republic of Belarus’ banking system was owned and managed by the central government based in Moscow when it was a member of the Union of the Soviet Socialist Republics (USSR). Gosbank was the nation’s central bank and its only commercial bank, handling all significant banking transactions. This included the issuance and control of currency and credit, management of the gold reserve, and oversight of all transactions. Gosbank had main offices (Republican Banks) in each of the republics, and, since the banking system was highly centralized, it played an important role in managing the economy.

The transformation of the centrally-planned economy into a market-type economy resulted in a major reorganization of the banking system itself in 1987. These reforms laid the basis for the transition of the existing monetary system to a new two-tier banking system. The first of these levels is represented by the National Bank of the Republic of Belarus (NBRB), established on the basis of the Byelorussian Republican Bank of the USSR State Bank. NBRB is the central bank of the country and its main tasks are as follows:

  • Protecting the Belarusian ruble and ensuring its stability, including its purchasing power and the rate of exchange relative to foreign currencies;
  • Developing and strengthening the banking system of the Republic of Belarus; and
  • Ensuring efficient, reliable, and secure functioning of the payment system.

The second level of the banking system is represented by commercial banks through which the monetary policy of Belarus is implemented. Thirty-one banks comprise the banking sector of Belarus, and state banks account for 75 percent of the banking sector.

Today Belarus has a fairly good financial infrastructure compared to other former USSR republics and the physical access to banks is on average respectable, but the use of financial services is still relatively low. According to the National Survey Results conducted in 2012 by the NBRB 67.7 percent of the adult population holds a bank account, 33.7 percent took a loan from a bank, and 19 percent of adults have savings and deposit accounts.

Since becoming a member of the AFI Network in 2010, the NBRB assumed the lead role in promoting financial access policies in the country, and made a Maya Declaration Commitment to increase the number of adult population holding accounts with banks to 85 percent by 2015.

In order to better understand the reasons for the low uptake of financial services, the NBRB with the financial support from a grant from AFI implemented its “Measuring Access to Finance: Developing Evidence-based Access Policies in Belarus” project during 2011-2013. In the framework of the project, the bank analyzed the market conditions and the policy environment that constitute access to financial services in Belarus and is now in the process of consolidating the respective efforts of the different state agencies, financial market participants, private sector, educational establishments, scientific and research institutions, etc., to jointly finalize the National Financial Inclusion Strategy for Belarus for 2016-2020.

The comprehensive financial access research and developed national strategy are the first implemented and developed in the region of Eastern Europe and Central Asia, and there is considerable interest by governments and central banks from the ECA region, since these countries share common history and almost identical policy and regulatory environments. To share its own financial inclusion experience and learn from best practices of other central banks and government authorities of the CEE and CIS and other AFI Network members, the NBRB will host a Regional Financial Inclusion Policy Forum for more than 20 central banks that will held in Minsk in May 2015.

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