The Central Bank turns on the savings mode – Newspaper Kommersant No. 33 (7478) dated February 27, 2023

The Bank of Russia is preparing to cut staff and payroll costs, some payments have already been canceled. We can talk about the release of about 1 thousand people, that is, the largest optimization since the beginning of the pandemic in 2020. Market participants consider the reductions justified, believing that the regulator’s staff is redundant, while some of the operations in the current environment have either disappeared completely or are taking place in significantly smaller volumes. Experts specify that digitalization has reduced the importance of regional divisions of any structures.

As it became known to Kommersant, it is planned to cut staff by 1,000 employees in the central office of the Central Bank by May. According to one of Kommersant’s interlocutors close to the Central Bank, “cut orders were also transferred to regional divisions.”

Kommersant’s sources specify that the spring wave of cuts will be only the first stage, the second is scheduled for autumn. The main goal is to optimize costs, Kommersant’s interlocutors believe.

Another source of Kommersant said that the Central Bank has already canceled material assistance, which was paid to employees for vacation and amounted to two monthly salaries. The Bank of Russia reported that they are constantly improving their efficiency and 2023 will not be an exception. Since 2015, the number of employees has decreased by 30%, according to the Central Bank. “The introduction of new business processes and their constant updating allow us to manage the number of staff in a quality manner,” the regulator said.

The Central Bank reduced the number of employees in previous years, but such a large-scale reduction has not been for a long time. Thus, according to the report of the regulator for 2020, the block of non-credit financial institutions of the central office was reorganized. On the basis of the abolished Department of the Securities Market and the Commodity Market and the Department of Collective Investments and Trust Management, the Department of Financial Market Infrastructure and the Department of Investment Financial Intermediaries were created. But part of the personnel optimization measures was postponed due to the pandemic, “in connection with which, in 2020, the number of personnel of the Bank of Russia as a whole did not change and amounted to 49.4 thousand units.” In 2021, the data management statistics department and the reporting processing department were merged. For the whole of 2021, the decrease in the number of staff of the Central Bank amounted to only 300 people.

According to the recruiting agency HeadHunter, at the end of February in Russia as a whole, there were 1,265 employees with experience in the Central Bank who are considering job offers. 887 people are actively looking for work.

Experts note that claims have been made against the Bank of Russia on a number of occasions related to the high number of its employees. According to Roman Prokhorov, head of the board of the Financial Innovations Association, only the Bank of China has more staff from central banks. In principle, to solve the problem of increasing the efficiency of the activities of employees of the Bank of Russia and optimizing their staffing, according to Mr. Prokhorov, could “expand the implementation of the principles of self-regulation of activities in various sectors of the financial market.”

At the same time, a Kommersant source familiar with the situation in the Central Bank claims that the current reduction “is not least necessary to allocate funds for the creation of Central Bank units and recruit staff for work in the DPR, LPR, Kherson and Zaporozhye regions.”

With the right approach, staff optimization is not critical for the Central Bank, market participants are sure.

“But, unfortunately, what often happens is not the identification of unnecessary, bloated units, but a mechanical reduction at the expense of those who are less able to defend themselves and do not like the first person,” notes one of Kommersant’s interlocutors.

There are opportunities for competent reduction, experts believe. Thus, the head of the National Payments Council, Alma Obayeva, notes that the reduction in staff can be carried out by reducing the number of personnel in the supervisory block of the Bank of Russia. “There are fewer and fewer banks, there are practically no new ones, in addition, much smaller volumes are processed for a number of transactions, and for a number of transactions there are no transactions at all: currency, securities, foreign correspondent accounts,” Ms. Obayeva explains. Another expert, who spoke on condition of anonymity, added that “regional divisions are losing their meaning in an era of online reporting and the dominance of federal banks.”

Maxim Buylov