Main   /  Events  /  Archive

Introduction of Pavel Kallaur as Chairman of the Board of the National Bank

30 December 2014
The National Bank got broad powers for the sake of enabling the normal operation of the country’s banking industry, President of the Republic of Belarus Alexander Lukashenko as he introduced newly-appointed Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Pavel Kallaur on 30 December.

The head of state underlined that in Belarus the National Bank will no longer be “a regulator of I don’t know what because commercial banks do not depend on anyone, they are self-determined, and they cannot be ordered.”

“You should run all the banks in the country the way you think is necessary for the sake of accomplishing the tasks given to the National Bank,” the President said.

“Enough toying around, making jokes and playing democracy. The country must not face new shocks. State interests must be above corporate ones,” Alexander Lukashenko continued. “If some bank disagrees with these rules, act correspondingly. You have the power in your hands so act! You don’t have to work with such executives,” he added.

According to the President, another destabilization of the economic and financial situation in the country is inadmissible. “Things like that should not happen anymore. We should recover with decency even from the most complicated situations. Bear in mind that it is your task, your area of responsibility. God forbid if things like that happen again. And you will face the toughest kind of measures,” the President said.

“The entire banking system is your system. If you lack some powers, you just have to ask. You can be granted those powers even tomorrow, on the last day of this year,” the President noted.

Alexander Lukashenko said that at the same time the National Bank will be fully responsible for the operation of banking system institutions. According to the head of state, Pavel Kallaur will be personally responsible for the effectiveness of the loans granted by banks among other things. “You can give loans only for the projects that can pay their way, for the projects of vital national importance, for real business plans. If the rule is not observed, it means that the bank runs unnecessary risks. It cannot be allowed! Therefore, you will have to step up banking oversight,” the President said. He added that not only those, who waste bank loans, but those, who expect they will never see the money again but still lend the money, will bear responsibility for the ineffectively used funds.

The head of state stressed that the National Bank is now facing a difficult task. Alexander Lukashenko named the priorities for the National Bank, among them is the stability of the national currency. "You have a strategic objective which is to strengthen the trust of people and enterprises in the national currency, the Belarusian ruble," the President said.

"This means reducing the dollarization of the economy. But not by artificial restrictions. We need real, effective measures that will give concrete results like the increase in deposits and loans in the national currency,” Alexander Lukashenko added.

The President stressed that people should not be afraid of keeping their savings in Belarusian rubles instead of foreign currency. We do not want people to "rush to exchange offices upon receiving a paycheck, getting rid of rubles."

Alexander Lukashenko noted that retail deposits are protected by the state. "It has always been like this and it will remain so," he said. The President noted that the National Bank has stabilized the situation for the time being. But the head of state wants forward vision and proactive efforts, especially in matters of exchange rate policy. Resilience of the exchange rate to external shocks is an important factor, the head of state continued. "Our currency should be less dependent on the other currencies. It should be backed by the national wealth, gold and currency reserves. Our task, and above all yours, is not just to maintain but to increase the reserves of the country. To do this, we need to improve the balance of payments,” the President said.

Apart from that, Alexander Lukashenko said that the financial market of Belarus should be sorted out. "Our financial market is something ephemeral. Please put things right here. A person can invest in commodity, currency, or in shares and bonds of enterprises. This is one of the ways to tie the money of people. Both enterprises and the state benefit from this. Instead of applying to banks for loans, a company can issue bonds, collect money and invest it in its own development,” the head of state noted.

The President warned against fraud in this sector. This requires, on the one hand, strict control, and on the other hand, the financial literacy of people and business, Alexander Lukashenko believes. He requested the National Bank to sponsor, if necessary, legislative financial market development initiatives, possibly jointly with the government.

The President drew the attention of the National Bank to the need to expand the use of cashless payments as this will improve the monitoring of financial flows in the country. “Non-cash payments should be easy and understandable both to people and businesses. Then this system will become effective and popular,” the Belarusian leader is convinced.

Alexander Lukashenko said that the common payment system will be created in the Eurasian Economic Union. "You need to start preparing for this already today. You need to improve the system of mutual settlements and find profitable schemes for Belarus,” the head of state said.

Alexander Lukashenko tasked the National Bank with increasing the efficiency of the banking system. Banks should attract additional financial resources into the banking system, so that they could provide loans to the real economic sector. “Banks should expand their operations on the international market and tap the debt market, no matter how hard or even impossible it might be,” Alexander Lukashenko emphasized. He added that banks should look for money the same way as exporters look for new sales markets. Belarusian banks with foreign capital should not wait for parent banks to give them money, but to be the first to enter foreign markets, Alexander Lukashenko added.

The President is in favor of direct investments into the banking sector and establishment of new banks both with Belarusian and foreign capital. “Let them compete and offer better loan terms. This matter should be under your control. The National Bank should keep track of everything. Our country is not that big, therefore we are quite capable of implementing the unified banking operation rules,” the President noted.

The head of state underlined that state-run banks should not be neglected. “However, they are “hand-fed” and keep hoping for government support. I have tougher requirements for them: banks should support the state, not vice versa, especially today. Therefore, it is necessary to sort things out with the state-run banks and improve their performance,” Alexander Lukashenko demanded.

The National Bank should pay attention to the profit margins and the prime cost of banking services, salaries and non-core assets of banks, the President added. “Banks should stop sheeting fat profits. Of course, our bankers do not live as large as their counterparts in the neighboring states. However, the banking industry posts much bigger profits compared to other economic sectors in Belarus. There should not be such a gap. The banking sector does not produce assets, it just services the real economy,” Alexander Lukashenko said. He instructed the National Bank to come to grips with this issue.

The President expects that the National Bank and its newly-appointed head will come up with new concrete proposals and initiatives that will generate practical results.

The head of state thanked former chairperson of the board of the National Bank Nadezhda Yermakova for good work. The President noted that she will not leave the banking system because her knowledge and experience will be in demand in the future.
© 2018, The Press Service of the President of the Republic of Belarus