OREANDA-NEWS. By its Order No. OD-3645, dated 25 October 2016, the Bank of Russia revoked the banking licence from the Saint Petersburg-based credit institution commercial bank Financial Capital, limited liability company, or LLC CB Financial Capital (Registration No. 3288) from 25 October 2016.

The Bank of Russia took such an extreme measure — revocation of the banking licence — due to the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violation within a year of the requirements of Articles 6, 7 (except for Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and Bank of Russia regulations issued in compliance with the said federal law, inability to meet creditors’ claims on monetary obligations, considering repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, guided by Article 19, Clauses 6, 61 of Part 1 and Clause 4 of Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’ and Part 11 of Article 74 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’

LLC CB Financial Capital implemented high-risk lending policy connected with placement of funds into low-quality assets. Meeting the supervisor’s requirements on creating loan-loss provisions resulted in the grounds for the credit institution to take insolvency (bankruptcy) prevention measures. Due to unsatisfactory asset quality to generate sufficient cash flow, the bank failed to meet obligations to creditors on a timely basis. LLC CB Financial Capital did not comply with legislation and Bank of Russia regulations on legalisation (laundering) of criminally obtained incomes and financing of terrorism with respect to timely submission of true and full information to the authorised body, including information on operations subject to mandatory control. The management and owners of LLC CB Financial Capital did not take effective and sufficient measures to normalise its activities. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.

By its Order No. OD-3646, dated 25 October 2016, the Bank of Russia has appointed a provisional administration to LLC CB Financial Capital for the period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies are suspended.

LLC CB Financial Capital is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ ‘On Insurance of Household Deposits with Russian Banks’ regarding the bank’s obligations on household deposits determined in accordance with the legislation. The said federal law stipulates the reimbursement of insurance premium to the bank’s depositors, including individual entrepreneurs, in 100% amount of the balance of funds, but not more than 1.4 million rubles in aggregate per depositor.

According to the financial statements, as of 1 October 2016, LLC CB Financial Capital ranked 512th by assets in the banking system of the Russian Federation.