Issuing bank or bank of issue - a bank that issues money, securities or payment instruments - bank cards, check books.
Banks that issue money
The issuer of money in the country is mainly central banks. Under Russian law, the money is issued by the Central Bank of the Russian Federation. The emission of cash in Russia is based on the principle of monopoly and uniqueness, i.e. such powers are exclusively vested in the Bank of Russia.
Also, the Central Bank controls the turnover of the money supply in the country and, if necessary, can withdraw or additionally issue money. This decision is made by the Board of Directors of the Bank of Russia.
Commercial banks can act as banks issuing non-cash money, but their actions are under the control of the Central Bank.
Banks issuing securities
Like other legal entities, a bank can also act as an issuer of securities (traveller's checks, stocks, bonds, savings certificates). The issue of securities is carried out in order to attract additional borrowed funds to finance its own activities or to form the authorized capital.
When a bank exercises its right to issue, it also assumes the obligations associated with the issued securities.
Banks that issue bank cards
Issuing bank - an organization that issues and maintains bank cards. Bank cards issued by the issuing bank are the property of the bank, they are transferred for temporary use to their holders. Banks act as guarantors of the fulfillment of financial obligations arising from the use of these cards.
The issuing bank performs a number of functions. Before presenting the card to the client, he opens an account for its holder, from which funds are subsequently debited in favor of the seller of the goods. The bank must provide the client with account statements and maintain accounting records of card transactions. The issuing bank is obliged to ensure the security of payments and to consider customer complaints.
A bank can act not only as a bank card issuer, but also be an acquiring bank at the same time, i.e. authorize the card when paying with it at retail outlets and provide transfers from the seller to the buyer.
Also, the issuing bank is a bank that acts on behalf of the applicant (payer) to open a letter of credit. He is obliged, at the request of the beneficiary (payee), under the conditions stipulated by the contract (for example, upon presentation of the shipment document, invoices), to transfer money in his favor.
The issuing bank also occurs in collection operations. He is obliged to receive payment and acceptance of payment on behalf of the client.
