Gosbank

Gosbank

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Gosbank was the central bank of the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

 and the only bank whatsoever in the entire Union from the 1930s until the year 1987. Gosbank was one of the three Soviet economic authorities, the other two being "Gosplan
Gosplan
Gosplan or State Planning Committee was the committee responsible for economic planning in the Soviet Union. The word "Gosplan" is an abbreviation for Gosudarstvenniy Komitet po Planirovaniyu...

" (the State Planning Committee) and "Gossnab
Gossnab
Gossnab of USSR, State Supplies of the USSR was active in 1948-1953, 1965-1991. It was the state committee for material technical supply in the Soviet Union...

" (the State Committee for Material Technical Supply). The Gosbank closely collaborated with the Ministry of Finance of the USSR to prepare the national state budget.

Foundation


The foundation of the bank was part of the implementation of the New Economic Policy
New Economic Policy
The New Economic Policy was an economic policy proposed by Vladimir Lenin, who called it state capitalism. Allowing some private ventures, the NEP allowed small animal businesses or smoke shops, for instance, to reopen for private profit while the state continued to control banks, foreign trade,...

. On 3 October 1921, the All-Russian Central Executive Committee (VTsIK), passed a resolution for the founding of the State bank of the Russian Soviet Federative Socialist Republic
Russian Soviet Federative Socialist Republic
The Russian Soviet Federative Socialist Republic , commonly referred to as Soviet Russia, Bolshevik Russia, or simply Russia, was the largest, most populous and economically developed republic in the former Soviet Union....

. This was followed by a similar resolution passed by Sovnarkom on 10 October 1921. It began operations on 16 November 1921. In 1923 it was transformed into the State Bank of the USSR. It was placed under the jurisdiction of Narkomfin.

The Soviet state used Gosbank, primarily, as a tool to impose centralized control upon industry in general, using bank balances and transaction histories to monitor the activity of individual concerns and their compliance with Five-Year Plans and directives. Gosbank did not act as a commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

 in regard to the profit motive. It acted, theoretically, as an instrument of government policy. Instead of independently and impartially assessing the creditworthiness of the borrower, Gosbank would provide loan funds to favored individuals, groups and industries as directed by the central government.

As the Union neared economic collapse, and also as part of Mikhail Gorbachev
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev is a former Soviet statesman, having served as General Secretary of the Communist Party of the Soviet Union from 1985 until 1991, and as the last head of state of the USSR, having served from 1988 until its dissolution in 1991...

's perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...

 program, other banks were formed, including; "Promstroybank" (USSR Bank of Industrial Construction), "Zhilstoybank"(USSR Bank of Residential Construction), "Agrobank" (USSR Agricultural Bank), "Vneshekonombank" (USSR Foreign Trade Bank), and "Sberbank
Sberbank
Sberbank Rossii is the largest bank in Russia and Eastern Europe. The company's headquarters are in Moscow and its history goes back to Cancrin's financial reform of 1841...

" (USSR Savings Bank). "Sberbank
Sberbank
Sberbank Rossii is the largest bank in Russia and Eastern Europe. The company's headquarters are in Moscow and its history goes back to Cancrin's financial reform of 1841...

" continues to this day as one of Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

's largest banks, retaining senior ex-Gosbank personnel and most of the present Russian government's banking business.