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The People’s Bank of the RSFSR

On October 25 (November 7), 1917, the Bolsheviks seized the State Bank building in Petrograd (St. Petersburg), but it was only until two months later that they actually took control of the bank and its operations. In the morning of December 14 (27) the Bolsheviks seized the Petrograd commercial banks and later in the evening the All-Russian Central Executive Committee (VTsIK) issued a decree on the nationalisation of banks, establishing a state monopoly on banking. Private credit institutions were nationalised and merged with the State Bank, which a month later was renamed the People’s Bank of the Russian Republic (still later it was renamed the People’s Bank of the Russian Soviet Federative Socialist Republic (RSFSR)).

Until its abolition in 1920, the People’s Bank formally functioned in conformity with its 1894 Charter, to which some amendments had been made. In reality, however, its activities were regulated by decrees and resolutions of the Council of People’s Commissars, the All-Russia Central Executive Committee, the All-Russia Economic Council and the People’s Commissariat of Finance. The principal function of the bank was to issue paper money.

After the autumn of 1918 the People’s Bank, which was a part of the People’s Commissariat (Ministry) of Finance, known by its acronym as Narkomfin, began to finance the economy and draft budgets. The policy of War Communism brought about non-cash settlements between state enterprises and institutions and eventually the bank stopped conducting any lending operations. Its functions as a settlement centre were reduced to a minimum: all settlements were effected with the state budget as enterprises received budget funds and then transferred their profits to the budget.

Thus, within two years the nature of the People’s Bank had changed. It turned into a body, which along with the financial authorities, mainly serviced budget operations. The functioning of the two parallel structures was senseless. Moreover, the very existence of an institution called the People’s Bank contradicted the idea of a moneyless economy, which the Bolsheviks were trying to build. As a result, the People’s Bank of the RSFSR was abolished on January 19, 1920, and the small number of banking operations that remained began to be conducted by Narkomfin’s Central Budget and Settlements Administration.

Senior Executives of the State Bank — People’s Bank of the Russian Republic — People’s Bank of the Russian Soviet Federative Socialist Republic (RSFSR)

1. Pestkovsky S.S. Commissar of the State Bank as a governor in 1917
2. Obolensky V.V. Chief Commissar of the State Bank in 1917
3. Pyatakov G.L. Chief Commissar of the People’s Bank of the Russian Republic — People’s Bank of the RSFSR in 1917-1918
4. Spunde A.P. Acting Chief Commissar of the People’s Bank of the RSFSR in 1918
5. Popov T.I. Chief Commissar of the People’s Bank of the RSFSR in 1918
6. Ganetsky Ya.S. Acting Chief Commissar of the People’s Bank of the RSFSR in 1918-1920