Manual for Russian financial institutions

For expats living in Russia, a local bank account is essential for managing financial transactions. Here is an overview of the primary Russian financial institutions.

Russia’s banking sector has experienced significant modernization in recent years, with an increasing number of providers offering online and app-based banking services. However, cash remains predominant in rural regions of the country. This guide to Russian financial institutions covers the following:

• The financial system in Russia;
• Currency in Russia;
• ATMs and Cash dispensers in Russia;
• Financial institutions in Russia;
• Financial services in Russia;
• Establishing a bank account in Russia;
• Payment options in Russia;
• Cash transactions;
• Checks;
• Debit cards;
• Credit cards;
• Automated payments and standing orders;
• Online and mobile transactions;
• International money transfers;
• Financial charges in Russia;
• Overseas banking in Russia;
• Responsible banking in Russia;
• Financial security and fraudulent activities in Russia;
• Reporting lost or stolen payment cards in Russia;
• Filing a complaint regarding financial institutions in Russia;
• Helpful references.

The financial system in Russia

The Russian financial system consists of two main components: the central bank and commercial banks. The Bank of Russia oversees the nation’s financial institutions and granting of banking licenses. As of May 2021, there are 350 operating financial institutions in Russia – 239 hold a comprehensive license (available to institutions with capital exceeding 1 billion p.), while 111 smaller entities possess a basic license.

Although the financial system in Russia does not match the technological standards of some Western counterparts, it has made substantial progress in recent years.

Contemporary cityscape of Moscow Russia

Inhabitants of remote regions in Russia may not possess a financial account, but the use of cash has significantly declined over the last decade. In 2012, approximately 76% of transactions were cash-based, which decreased to only 31% by 2019. Data from SberBank, Russia’s largest bank, revealed that 68% of all electronic transactions were made using payment cards in the initial half of 2019.

Currency in Russia

The official currency in Russia is the ruble or rouble (RUB/p.), with 100 kopeks (or Kopecks) equivalent to one Russian ruble. The most commonly used Russian banknotes are 50, 100, 500, 1000, and 5000 p., while coins are available in denominations of 1, 2, 5, к.10, and к.50 p.

As of 23d Fabruary 2024, the prevailing exchange rates are as follows:

$1 = 92.75 p.
€1 = 100.44 p.
£1 = 116.98 p.
CN¥1 = 12.79

For current exchange rates, visit the Bank of Russia’s website.

ATMs and Cash dispensers in Russia

ATMs are widespread in major Russian cities like Moscow and St. Petersburg. Many ATMs managed by leading Russian financial institutions offer instructions in both English and Russian. However, if traveling to remote or secluded areas, it’s advisable to have some Russian currency as a contingency.

Concerning security, it is recommended to utilize ATMs operated by prominent financial institutions and to avoid secluded ATMs, especially during nighttime.

When using a foreign card to withdraw cash from an ATM, there may be a service fee involved. This fee is imposed by your bank rather than the ATM provider, and the amount can vary significantly across different providers (refer to your terms and conditions). In certain cases, the fee may be higher if you utilize an ATM managed by a competitor bank.

Financial institutions in Russia

The six major financial institutions in Russia are listed below:

Sber Bank (state owned)
VTB
Gazprombank
VTB24
Bank Otkrytie
Pochta Bank

In Russia, the working hours of bank branches vary. In case you are a client of a bigger institution, the operating hours typically range from 9:00 to 17:00 or even 18:00 on weekdays, and from 9:00 until approximately 15:00 on Saturdays

Managing an account is simple in major urban areas. Nevertheless, it can pose challenges in remote regions where bank branches are scarce.

Banking facilities in Russia

Russian banks provide expats with a variety of products, from standard current accounts to regular savings accounts. The leading Russian banks also offer additional services like mortgages, business loans, brokerage, and investments.

Current accounts: Various current accounts are accessible in Russia, with charges based on the inclusive services. For instance, Savings Bank provides an array of options ranging from basic debit card accounts to premium accounts that can be launched in diverse currencies.

Credit cards: Russian banks furnish an assortment of credit cards, incorporating benefits such as airline miles, cashback, and shopping discounts. Some credit cards carry no fees, while others come with an annual fee.

Loans: The majority of major banks extend loans to individuals with permanent residency in Russia. The loan amount you qualify for will vary depending on the loan’s purpose (e.g. debt consolidation or car purchase) and your annual income.

Savings accounts: Instant access and fixed-term savings accounts are on offer in Russia. Similar to many countries, current interest rates are quite low, with rates for instant access savings accounts at approximately 0.15%.

Mortgages: Numerous leading banks provide mortgages to expats seeking to acquire homes in Russia. Generally, expats will be required to make a down payment of at least 20% of the property’s value.

Insurance: Banks feature a broad selection of insurance products, from income protection strategies to health insurance schemes.

Initiating a bank account in Russia

Opening a bank account in Russia can be done in person at a branch or online. Some employers may automatically set up a bank account to deposit your salary when you commence employment.

While applying for an account, certain banks might request a letter from your employer as part of the procedure.

Payment modalities in Russia

Cash

The usage of cash varies depending on the region within Russia where you are situated. As previously mentioned, the predominance of cash in Russia has significantly declined over the past decade, but more remote regions still extensively rely on it as a mode of payment.

Data by Sber Bank reveals that non-cash transactions surpass 60% of all transactions in five cities, with Syktyvkar and Severodvinsk topping the list. In St. Petersburg, cashless transactions constitute 55% of transactions, whereas in Moscow the figure stands at 54%.

Checks

Checks (cheques) are not commonly used in Russia due to their protracted processing time.times, and financial institutions tend to impose a fee to cash them. The amount you will need to pay depends on the sum of money being cashed and the currency you are using.

Debit cards

Debit cards are commonly utilized in Russia. Historically, Visa and Mastercard were the predominant types, but their supremacy is now facing challenges.

In 2015, the Russian government established a fresh payment card network named Mir, subsequent to Visa and Mastercard discontinuing some Russian services due to sanctions from the US and EU.

Indication for the Mir payment system on an ATM in Russia
Mir is gaining popularity. Data from GlobalData indicates that by 2020, slightly below 75 million debit cards have been distributed by Mir. This accounts for 29% of all debit cards in Russia. The Russian government mandates that vendors with an annual turnover exceeding 30 million p. must acknowledge Mir. This threshold will decrease to 20 million p. in July 2021.

Most Russian banks provide debit cards equipped with contactless technology. Contactless transactions involve tapping your card on a reader instead of entering your PIN, and you can carry out transactions of up to 1,000 p. utilizing this feature.

Credit cards

Upon opening a bank account, you will typically receive a debit card for your day-to-day expenses rather than a credit card, but you have the option to separately request a credit card account.

Most foreign credit cards are accepted in hotels and restaurants in Russia, although you might need to make cash payments in certain locations such as museums, smaller stores, and when hiring a taxi. Utilizing a foreign credit card might entail foreign transaction charges and currency conversion costs, the amount of which will differ based on your provider.

Automated transfers and scheduled payments

Direct debit payments are prevalent in Russia. By arranging an automated payment from your bank account for your utility bills, you can potentially benefit from reduced transaction costs. Alternatively, most banks permit you to settle your bills via bank transfer using their online banking platforms or ATMs.

Online and mobile payments

Major banks in Russia provide their personal online banking services and applications that enable you to carry out a variety of everyday activities without needing to visit a physical branch.

Online and mobile banking deliver features like domestic and foreign currency transfers, bill payments, scheduled payments, and digital statements.

International money transfers

Most banks in Russia offer wire transfer services. In the event of an international wire transfer, the funds are typically received by the recipient within a couple of business days. You might need to incur a charge ranging from 1% to 2% of the transferred amount. Some banks do not permit online international money transfers. In such instances, you will have to visit a branch with proof of identity and the recipient’s particulars.

Below are the finest methods for conducting international money transfers

If you are contemplating transferring funds to your home nation on a consistent basis, you could mull over opening an account in that currency in addition to your Russian bank account. This could be arranged through the Russian or Moscow International Bank or one of the alternatives. Not only will this help reduce fees, but it will also enable you to steer clear of unfavorable exchange rates.

Banking charges in Russia

Similar to numerous countries, fees for banking services fluctuate depending on the type of account you hold. Basic currentAccounts come with no yearly charges, yet those with small initial fees may justify their cost by offering added advantages like complimentary ATM withdrawals and money transfers.

Russia ATM cash withdrawal

When withdrawing cash from an ATM in Russia, you may encounter fees. These charges might be higher if you utilize an ATM operated by a bank different from your own. The fee amount varies, so it may be wise to withdraw larger sums occasionally.

Offshore banking in Russia

For some expatriates residing in Russia, establishing an international offshore bank account could be a wise financial move. Offshore banking presents numerous advantages such as robust customer protection and an array of investment options. If you are contemplating offshore banking, consult with a financial advisor for optimal investment opportunities.

Diverse currencies feature in offshore savings accounts, and these accounts are often easily transferable across regions. Nevertheless, certain savings accounts necessitate substantial deposits at initiation. Previously, Russian investors frequently relied on offshore accounts in Cyprus until the financial crisis struck in 2013, prompting them to shift to favored offshore investment destinations like Luxembourg, Singapore, and the British Virgin Islands.

Ethical banking in Russia

Russian financial institutions are increasingly emphasizing ethical and sustainable practices. In January 2021, Sberbank committed to the United Nations’ principles for responsible banking.

The Association of Banks of Russia has also pledged to uphold environmental and social guidelines.

Banking security and fraud in Russia

Instances of bank fraud and scams are proliferating worldwide, and Russia is not immune. As per a 2020 survey by the NAFI Analytical Center, one-third of cardholders in Russia reported falling victim to fraud, which includes telephone and money transfer schemes, malicious links in messages or letters, and fraudulent card transaction notifications.

The Bank of Russia issued a caution to consumers regarding telephone fraud and provided guidance on evading scams in December 2020.

Lost or stolen bank cards in Russia

If your debit card goes missing, you should locate your bank’s call center details on their website. Depending on your account terms, you might incur a fee for card reissuance.

To learn about reporting lost or stolen cards at major banks in Russia, you can visit the following links:

Citi Bank
Sberbank
Raiffeisen Bank
Mastercard Russia
Visa card Russia
Making a complaint about banks in Russia

The Bank of Russia disclosed receiving over 63,000 complaints in the initial quarter of 2021.

If you face an issue with a Russian bank and are dissatisfied with their resolution, you can lodge a formal complaint with the Bank of Russia. Ensure to furnish evidence of the problem and your contact information while filing a complaint.