About bank secrecy and its importance
Do I trust banks today?
Banks have firmly entered everyone's life, playing an essential role in it. In banks we take loans for our own needs, for the purchase of real estate, make deposits, open current accounts and much more. At the same time we entrust our confidential information to banking structures on 100%. If you think about it, we have no other choice, because no one has canceled the identification of clients yet. If you refuse to provide this data, with a high probability you will simply be refused service.
Fortunately, the banks themselves cannot use the information provided by users for selfish purposes, as the state protects its residents at the legislative level. Thus, thanks to the development of the institution of banking secrecy, in particular, all nondisclosure requirements are specified in the law on banks and banking activities, as well as other acts.
The place of banking secrecy in the legislation of the Russian Federation
Banking secrecy is a legal norm for all countries of the world, which is enshrined in law. In particular, according to The law "On Bank Secrecy" Financial institutions protect all confidential information received from customers regarding their financial condition, account transactions, and other information that must never be disclosed.
If this information is discovered by someone else, it will be considered a violation of the customer's right to privacy. If the bank has used the confidential information provided for its own purposes or it has been disclosed, the customer has the right to claim compensation for the damage caused.
In many countries of the world, banking secrecy is taken so seriously that banks are not allowed to provide relevant information about customer accounts, even to government agencies, even if criminal proceedings have been instituted against a customer.
Who can know bank secrecy
According to the legislation of the Russian Federation, namely, the law "On Banks and Banking Activity" (Article 26), the information that relates to bank secrecy, may be shared only with the Bureau of Credit History, the client himself or his representative, the Audit Chamber, the tax authorities, the courts, the Deposit Insurance Agency, Customs Service, the investigating authorities, as well as bailiffs.
In addition, this information can be given to the social insurance fund and the pension fund. In all other cases it is not subject to disclosure.
Briefly about the history of banking secrecy
Banking secrecy was not created today, not yesterday, and not even a few years ago. If we want to find the origins, we have to go back several centuries, because even then the governments of various countries tried to take total control of all financial institutions in order to get their hands on the tools to fight crime and the leverage to obtain tax revenues.
They were confronted by the banks themselves, who stood up to defend their clients, demanding that they respect financial secrecy and privacy. After all, only if customers are fully confident that their confidential information will not leave the bank, will they be able to trust the financial institution to take out loans and deposits, as well as to make settlement transactions. That was the original idea of banking secrecy. Today it is much the same, even though it is adapted to the current realities of our lives.
Follow us on your Facebook feed. Stay tuned for updates!