SBERBANK

Sberbank (the Savings Bank) was the monopoly, state-owned household savings bank of the USSR. It retained both its state ownership and its dominance of the retail banking market in the post-Soviet period, despite increasing competition from commercial banks. In the Soviet period, Sberbank's retail banking network encompassed approximately 70,000 branches and smaller "cash offices" (sberkassy) on almost every corner across the Soviet Union. The Ministry of Finance directly controlled this network until 1963, when it was incorporated into Gosbank (the state bank of the USSR). Sberbank's main task was to collect the individual deposits and invest them with the state. In addition, Soviet citizens paid their bills and picked up their pension checks at their local Sberbank offices.

After the breakup of the USSR, Sberbank Russia became a quasicommercial savings bank, with the Central Bank of Russia as its majority shareholder. Sberbank continued to invest a high percentage of its resources with the government (e.g., in government securities), giving it the nickname "the Ministry of Cash." Although commercial banks began to compete with Sberbank for retail deposits, Sberbank's share of the retail market never fell below 60 percent in the 1990s. This occurred for three reasons. First, no new bank could compete with Sberbank's extensive branch network. Second, the government explicitly insured deposits in Sberbank, while commercial banks had no deposit insurance system. Third, repeated commercial banking crises made Sberbank appear to be a safer choice than other banks. However, it bears noting that the vast majority of Russians chose to keep their savings outside of the banking system entirely.

See also: banking system, soviet; gosbank; stroibank

bibliography

Johnson, Juliet. (2000). A Fistful of Rubles: The Rise and Fall of the Russian Banking System. Ithaca, NY: Cornell University Press.

Tompson, William. (1998). "Russia's 'Ministry of Cash': Sberbank in Transition." Communist Economies and Economic Transformation 10(2):133–155.

Juliet Johnson