Government loan is a key form of government credit. It is carried out through the issuance of state. debt obligations (otherwise they are called treasury) guaranteed by the government. Our article will focus on the types of government loans and other equally important aspects of the issue.
Classification by reversal method
It is worth noting that only the Ministry of Finance has the right to raise borrowed funds on behalf of the Government of the Russian Federation. The concept of a public loan implies a fairly broad classification. So, in accordance with such a criterion as the method of circulation, they are divided into market and non-market.
Market government loans are those that are issued in the form of certain securities. The latter are distinguished by free circulation after the initial placement on the relevant market. Under non-market loans, it is necessary to understand loans that are formalized in stock instruments purchased by an investor from the Government. It is worth noting that they can only be sold to the Government.
By borrowing period
Government loan is a category that is also classified by the period of borrowing. So, loans can be short-term (in this case, the repayment period should not exceed 1 year), medium-term (repayment period varies from 1 to 5 years) and long-term (repayment period may exceed 5 years). According to the budget legislation of the Russian Federation, debt obligations are short-term (up to 1 year) and long-term (more than 1 year).
According to location and availability
According to criteria such as location, loans in the public economy can be divided into external and internal. The first category represents government obligations to non-residents. We are talking about foreign creditors. Domestic loans are nothing more than loans to residents of the country.
Depending on the criterion of security of state debt obligations. Loans are either mortgage or non-mortgage. The former are secured by a specific pledge, for example, certain property. In turn, unsecured loans differ in that they are not secured by anything specific. In this case, all state property acts as collateral.
According to the form of payment
Government loan is the main form of state. credit, which has a fairly branched classification. So, according to the income payment method, loans arethe following varieties:
- Interest-bearing loans. In this case, the income is set as a fixed percentage of the face value.
- Discount loans. The investor receives income by purchasing debt at a discount, as well as their subsequent repayment in accordance with the nominal value at the end of the fund for which the funds were provided to the borrower (the state).
- Winning loans. Income from this form of state internal credit is based on the circulation of winnings.
- Indexed loans. In this case, income is paid through indexation of the nominal value of the securities initially acquired by the investor.
Other classifications
Due to the obligation on the part of the borrower to fully comply with the terms associated with the repayment of the loan and determined at its issuance, it is customary to allocate obligations with the right to repay ahead of schedule and without this right.
In accordance with the sign of the holders of the Central Bank, there are loans that are sold exclusively among legal entities, among individuals, as well as universal, in other words, placed both among legal entities and among individuals.
By state issuers loans are classified, for example, into obligations issued by the Government of the Russian Federation and local government structures.
According to the areas of application of borrowed funds, government loans can be classified into targeted and non-targeted. It is worth noting that the money raised in accordance with targeted loans should only be used for financing purposes.specific, predetermined programs for the implementation of which they are placed. The proceeds from the placement of state loans of an untargeted plan are used to cover current budget expenses, refinance current debt, or for other needs. Their use is appropriate in case of a budget deficit (this is the excess of the expenditure side of the state budget over revenue).
Government borrowing rules
On the territory of the Russian Federation the right to exercise state. borrowing belongs to the Russian Federation, the Government of the Russian Federation, as well as residents of the country under the guarantees of the Government. On behalf of the Russian Federation, government borrowings (for example, issuing government bonds) are implemented by the Government of the Russian Federation.
Government borrowing is made within the boundaries of domestic and foreign public debt. It should be noted that they are established by law regarding the republican budget for the next financial year. The total volume of state. under no circumstances should borrowings exceed the volume of capital expenditures of the state budget in the relevant financial year.
Debt Forms
Debt obligations of the Russian Federation can be realized in the following forms:
- A loan agreement, in other words, a government loan agreement. It is concluded on behalf of the Russian Federation, acting as a borrower, with credit plan organizations, international structures, foreign states and other non-residents and residentscountries. It is also advisable to include agreements (agreements) concluded on behalf of the Federation regarding the restructuring and prolongation of the country's debt obligations remaining from previous years.
- Government loans, which are carried out through the issuance of the Central Bank on behalf of the Russian Federation.
- Agreements on the provision of appropriate guarantees of the Government of the Russian Federation.
- Government loans implemented through the issuance of the Central Bank by local administrative and executive bodies.
- Agreement regarding the provision of guarantees of local administrative and executive. This applies to regional, district and city executive committees.
- Agreement on obtaining a budget loan.
It is worth noting that today obligations in the form of contracts (loan agreements) are used most actively due to the need to create appropriate conditions in order to overcome the crisis in the economy and cope with the budget deficit (this is an excess of expenses over income). That is why it is advisable to consider this form in more detail.
Loan agreement. Borrower and Lender
As it turned out, the main form of debt is a loan agreement. This category is regulated by art. 817 of the Civil Code of the Russian Federation. Under the agreement of the state loan, the borrower is the Russian Federation or its subject, and the lender is an individual or legal entity. A government loan is in any case a voluntary decision. The corresponding contract is concluded through the purchaselender issued state. bonds or other government securities that certify the right of the lender to receive from the borrower the funds lent to him or, depending on the conditions of the loan determined in advance, other property, specific interest or other rights of a property nature within the terms provided for by the conditions of issuing the loan into circulation.
It should be noted that the state contract. a loan can also be concluded in other forms, described in the previous chapter and provided for by the budgetary legislation of the country (the paragraph was introduced by the Federal Law of July 26, 2017 N 212-FZ). Changing the established conditions of a state loan issued into circulation is unacceptable. Rules regarding the state contract. of the loan respectively apply to loans that are issued by the municipality.
Contractual relations
In relations related to the conclusion of loan agreements (in other words, contracts), the role of the borrower, as it turned out, is the Russian Federation represented by the relevant structures. These relations, together with the norms of the financial legal industry, are regulated by international law, which determines, among other things, the legal status of international financial organizations, the conditions, the procedure for providing, applying and repaying funds issued by these organizations. It is important to note that the involvement of external state. loans on behalf of the Federation are implemented by the government solely by decision of the President of the country.
External state. loans thatprovided to residents of the Russian Federation on the terms of assignment, in any case, are equated to external state. loans received under government guarantees. The purpose of attracting state loans of an external type must be indicated in the decision to attract it in accordance with the main purposes of borrowing, which are provided for by the President of the Russian Federation and relevant legislative acts.
Goals of attracting foreign loans
Next, it is advisable to consider the main objectives of attracting external government loans:
- Federation - in order to cover the deficit of the republican budget, as well as for other purposes that are provided for by the President of the Russian Federation and legislative acts in force on the territory of the country.
- The Government of the Russian Federation - to deal with environmental and social problems, eliminate the consequences of natural disasters and support economic reforms. This category also includes other goals envisaged by the President of the Russian Federation, as well as legislative acts in force in the country.
- By residents of the Russian Federation under government guarantees, as well as by the government and residents under government guarantees - in order to provide loans to resident borrowers in accordance with the terms of the assignment, that is, for the import of energy resources, raw materials, other necessary marketable products, as well as products in a critical situation in order to provide them to the republic; for the implementation of state programs and investment projects in accordance with priority areas for the development of the state economy; for other purposes according tolegislative acts functioning on the territory of the country.
It is worth noting that the decision regarding the attraction of a state loan is made by the president. In addition, it can be accepted by the Government, including in accordance with the terms of the assignment (by the government of the country after agreement with the president); residents of the Federation under the guarantees of the government, including under the terms of the assignment (by the government of the country after agreement with the president).
Issue of securities
It is important to keep in mind that government loans, which are carried out through the issuance of securities on behalf of the Federation, also play an important role in ensuring the state budget. This form of debt obligations of the country is also quite common. Under government securities it is necessary to understand the Central Bank, which are issued by the Ministry of Finance on behalf of the Russian Federation.
Securities of state importance can be issued in the form:
- Government bonds of a short-term type with a maturity of up to 1 year (GKO).
- Government bonds of a long-term type, the maturity of which varies from 1 year or more (GDO).
The issue of government bonds is carried out in order to attract funds from citizens and legal entities that are temporarily free, including foreign ones, as a rule, to finance the state budget deficit (as noted above, the deficit should be understood as the excess of expenditure over revenue).
Issue of bondscarried out on behalf of the Ministry of Finance. The volume of issue of securities is determined by this structure when drafting the republican budget, as a rule, for the next budget (financial) year. In any case, the volume is specified in the process of its execution in accordance with the procedure established by the legislation in force on the territory of the country.
In accordance with each issue of bonds, the Ministry of Finance of the country makes a decision containing information about their type, circulation period, date and volume of issue, maturity date, nominal value, current conditions for their placement, early redemption, interest income payments (this the paragraph concerns only interest-bearing bonds), as well as on the exchange of bonds.
Placement of securities among organizations is carried out by the following methods:
- Implementation at auction, which is carried out in accordance with certain rules approved by the bank, but in agreement with the Ministry of Finance.
- Direct sale by the Ministry of Finance to organizations on terms approved by this ministry.
- Transfer or sale of bonds to banks for resale.
Among individuals, bonds are placed in the order established by the Ministry of Finance.
Conclusion
So, we have examined the concept and classification of the state loan, dwelled in more detail on the most important aspects of the topic. In conclusion, it is useful to consider the category of government guarantee. It's a commitmentFederation, on behalf of which the government acts as a guarantor, to assume full or partial responsibility to the creditor for the repayment by the borrower (he is a resident of the country) of obligations related to the loan agreement concluded by this resident.
State guarantee as a form of public debt, used in financial law and even regulated by it, is based primarily on the general rules of civil law of the Russian Federation, which control relations related to the enforcement of obligations. At the same time, the norms of the financial branch of law play a key role in the regulation of state guarantees.
