OREANDA-NEWS. The Bank of Russia revoked a banking licence of the Moscow-based credit institution Agency Settlement and Credit System Bank (joint-stock company) or JSC Arxbank (Registration No. 1868) from 19 July 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, the application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, and considering the existence of a real threat to the interests of its creditors and depositors.

JSC Arxbank activities were aimed at attracting public funds and their placing in poor quality assets. At the same time, the credit institution did not create loan loss provisions adequate to the risks assumed. Regardless of limitations introduced by the supervisor for the attraction of household funds, JSC Arxbank pursued its aggressive policy to attract deposits. Under these circumstances the Bank of Russia took a decision to revoke the banking licence of JSC Arxbank.

By its Order No. OD-2289, dated 19 July 2016, the Bank of Russia has appointed a provisional administration to JSC Arxbank for the period until the appointment of a receiver pursuant to the Federal Law ‘On the 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.

According to reporting data, as of 1 July 2016, JSC Arxbank ranked 286th in the Russian banking system in terms of assets.