Gosbank was the controlling institution in the Soviet Union’s banking system. It would issue currency and the sums to be allocated to enterprises to pay wages and salaries. Political developments in 1991 made Russia's central bank practically independent of the Gosbank.
Gosbank carried out a variety of lending activities using the funds deposited in savings accounts. To a greater degree than in other European countries, the state bank was used as an instrument to direct economic growth. Gosbank provided loans to the railroad and manufacturing industries under risky terms that were similar to state subsidies and occasionally waived repayment of loans for industries that were considered vital to the nation's economy.