Putin’s central bank also found itself on Ukraine’s battleground

The duties of Sergey Belov – he is responsible for the so-called “field institutions” that effectively channel funds from the state budget to the combat forces – attract little attention. Unlike central bank governor Elvira Nabiulina and other senior officials, he is not subject to international sanctions.

A. Belov, 52, became deputy governor of the Central Bank of Russia in May last year and oversees “field points” as well as the cash circulation system. A graduate of the Defense Ministry’s Academy of Economics, he previously headed the central bank’s branch in Sevastopol, a city on Ukraine’s Crimean peninsula that Putin annexed in 2014.

This is an unprecedented case in recent times where a central bank military officer would also hold a civilian position, said Nikolai Krotov, a Russian financial historian.

On behalf of the Ministry of Defense, the so-called field institutions, run by the central bank, carry out banking operations to circumvent commercial creditors and prevent the disclosure of state secrets. By law, they are a branch of the military subject to military regulations.

The Central Bank of Russia has almost 90 such “field points” assigned to work near front-line units. They cater to a variety of banking needs, from opening a checking account or withdrawing cash to making money transfers and even issuing their own payment cards.

Although much of the economy was used to support the invasion, Russia’s central bank is trying to position itself as a bastion of technocrats seeking to regulate the country’s monetary policy amid unprecedented international sanctions.

“The appointment of a specialist of military origin in charge of the circulation of cash seems to be in tune with the times,” said Oleg Vyugin, former first deputy governor of the Central Bank of Russia. “Now in Russia the time has come for those who come from the military and security background: they have certain opportunities to make a successful career in many civilian sectors.”

A lifeline

The central bank did not respond to a request for comment. Asked about the “institutions on the ground” at a press conference in April, E. Nabiulina only replied that they were working as planned.

The obscure department, which until Belov was headed by the chief accountant of the central bank, becomes an essential link in the war economy at a time when the Kremlin tries to convince the greatest number of Russians to join voluntarily in combat by offering financial incentives and benefits.

The sphere overseen by S. Belov expanded with Russia’s occupation of part of four regions in eastern and southern Ukraine, after a government decree this year empowered ” field authorities” to manage budgetary funds for residents of the territories. In February, he attended a meeting in the occupied city of Mariupol on the provision of financial services.

In March, Russia’s lower house of parliament also passed a bill transferring responsibility for paying salaries and bonuses for all members of the armed forces to “field institutions” and government-selected creditors to provide security. military data.

The central bank headed by E. Nabiulina was granted enviable autonomy in Russia and once earned the title of the most “orthodox” in developing Europe. After the governor tried to step down following Russia’s February 2022 invasion of Ukraine, Putin reappointed her for another five-year term. Around the same time, the bank began transformations adapted to the new reality. In March last year, he bought sleeping bags, tents and wood-burning stoves for his “field institutions”. A few weeks later, S. Belov, who has headed the Department of Field Institutions since 2021, became the deputy of E. Nabiulina, although he did not become a voting member of the board which decides political matters.

His promotion to the post was a sign of the importance of the position and at the same time symbolic, because Belov replaces Mikhail Alekseev, a veteran of the bank and former president of the Russian unit of the Italian UniCredit SpA, which was sanctioned by the United States last April. .

The official biography of S. Belov is poor.

Originally from Tambov, he has spent most of his career in the central bank, starting as a “senior cashier” in grassroots institutions. In 2009, he was awarded the Order “For Military Merit” by presidential decree.

After the annexation of Crimea, Mr. Belov worked in Crimea, which means he was involved in Russia’s introduction of the ruble and the creation of a new financial system, an experience that could be useful to Russia to retake other occupied territories. Ukraine is ready to launch a counter-attack and regain territory.

Demand for cash increased after Russia replaced the Ukrainian hryvnia with the ruble in those regions in January, Alexei Zabotkin, deputy governor of the Central Bank of Russia, told a news conference on Monday.

Sergeius Dubinin, Governor of the Central Bank of Russia 1995-1998. period, described “field points” as “an intermediary between allocated budget funds and actual military units”. Although they have close ties to the military, he said he doesn’t recall ever having a deputy governor with a military background working at the bank.

Source: The Delfi

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