Wages were paid only in cash and households used cash exclusively for making payments.
Checkbooks, credit cards, and other alternative forms of payment were not available in the Soviet Union.
Wage earners could keep savings deposits in the Savings Bank (Sberbank), where they earned low interest, and these funds were available to the government as a source of income .
Two other banks also existed prior to 1987. The Construction Bank (Stroybank) provided investment credits to enterprises, and the Foreign Trade Bank (Vneshtorgbank) handled financial transactions to trade.
The Bank of Russia ( www.cbr.ru ) performs its functions in compliance with the Constitution of the Russian Federation and the Federal Law On the Central Bank of the Russian Federation (Bank of Russia) and other federal laws:
elaborates and pursues a single state monetary policy in interaction with the Government of the Russian Federation;
e xercises its exclusive right to issue currency and manages currency circulation;
acts as the lender of last resort for credit institutions and manages the system of refinancing them;
sets the rules to effect settlements in the Russian Federation;
manages all categories of budget accounts, unless otherwise is stipulated by federal laws, by effecting settlements upon the instruction of authorised bodies of executive power and government extra-budgetary funds responsible for organising budget execution and executing them;
efficiently manages Bank of Russia international reserves;
makes decisions on the state registration of credit institutions, issues banking licences to credit institutions and suspends and revokes them;
establishes the procedure and terms and conditions for the organisation by foreign currency exchanges of operations to buy and sell foreign exchange and issues, suspends and revokes permits granted to currency exchanges to organise operations to buy and sell foreign exchange;
analyses and makes forecasts on the state of the Russian economy as a whole and by region, especially with regard to monetary, foreign currency, finance and price relationships, and publishes corresponding materials and statistical data;
performs other functions in pursuance of federal laws.
Control of the money supply by lending funds to commercial banks and by establishing their reserve requirements.
In the early years, the CB R financed state budget deficits by issuing credits to cover Government expenditures. The availability of such credits played a central role in the high inflation that the Russian economy endured between 1991 and 1994. In 1995 new legislation and regulations reduced this type of credit by prohibiting the use of credit to finance state budget deficits