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Romania Banking institutions
The banking system in 1989 consisted of the National
Bank of
the Socialist Republic of Romania (known as the National
Bank), the
Investment Bank, the Bank for Agriculture and Food
Industry, the
Romanian Foreign Trade Bank, and the Savings and
Consignation Bank.
In addition, a centralized Hard Currency Fund was set up
in January
1988 to supervise all transactions involving hard
currencies and to
control the use of hard-currency earnings to finance
imports. The
new body included representatives of the National Bank,
the Foreign
Trade Bank, the Ministry of Finance, and the Ministry of
Foreign
Trade.
Established in 1880, the National Bank was the heart of
the
banking system. It issued the national currency, set
exchange
rates, monitored the flow of money, managed budgetary cash
resources, coordinated short-term credit and discount
activities,
and participated in the formulation of annual and
five-year credit
and cash plans in cooperation with the State Planning
Committee and
the Ministry of Finance. All industrial, transportation,
and
domestic trade enterprises maintained accounts in the
National
Bank. The bank also controlled the production, processing,
and use
of precious metals and gems and had exclusive authority to
purchase
from individuals items made of precious metals or stones
and items
of artistic, historic, or documentary value.
The Investment Bank, established in 1948, was the
conduit by
which investment resources--including state budget
allocations--
were directed to individual state, cooperative, consumercooperative , and other public organizations except for
foodindustry and agricultural enterprises. With hundreds of
affiliates
throughout the country, the Investment Bank adjudicated
loan
applications from enterprises and granted long-term
investment
credit after verifying that the money would finance
projects
consistent with the national economic plan. The bank
reviewed
technical and economic investment criteria and evaluated
the
feasibility of proposed investment projects on the basis
of
accepted standards. In theory, it approved only investment
projects
that satisfied all legal requirements regarding need,
suitability,
and adherence to prescribed norms; had an adequate raw
materials
base and assured sales outlets; and served to improve the
economic
performance of the organization undertaking the project.
The bank
also granted short-term credit to construction enterprises
and to
geological prospecting and exploration organizations. The
Investment Bank was responsible for calculating capital
depreciation allowances to be paid by the central
government to the
accounts of individual enterprises.
The Bank for Agriculture and Food Industry was created
in May
1971 by expanding the functions and changing the name of
the
Agricultural Bank established three years earlier. The
bank
provided investment and operating credits for
food-industry
enterprises, state and cooperative farms, and private
farmers and
financed the distribution of agricultural products within
the
country.
The Savings and Consignation Bank, originally called
the
Savings and Loan Bank, held the savings and current
accounts of
individual citizens. The bank mobilized the cash resources
of the
population for investment through obligatory periodic
transfers of
deposited funds to the National Bank.
The Romanian Foreign Trade Bank was established in July
1968.
In 1987 its deposits totalled nearly 168 billion lei. The
bank
collaborated with the Ministry of Finance to obtain and
manage
foreign credit, and it handled transactions in both
foreign
currencies and lei for import and export services and
tourism.
Through strict control of hard-currency allocations, the
bank
encouraged the substitution of domestic products for
imports.
In 1972 eight French banks joined the Foreign Trade
Bank in
setting up the Paris-based Banque Franco-Roumaine, which
had a
founding capital of 20 million francs. Later that year,
the AngloRomanian Bank with a founding capital of US$7 million was
established in London. And in 1976, the
Frankfurt-Bucharest Bank
AG, with a founding capital of DM20 million was set up in
Frankfurt.
Data as of July 1989
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