OREANDA-NEWS. By its Order No. OD-2339, dated 22 July 2016, the Bank of Russia revoked a banking licence of the Moscow-based credit institution Joint-Stock Commercial Bank Credit-Moscow (public joint-stock company) or Bank Credit-Moscow (PJSC) (Registration No. 5) from 22 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, capital adequacy ratios being below 2 percent, decrease in capital below the minimal value of the authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution, and the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

Given unsatisfactory quality of its assets, Bank Credit-Moscow (PJSC) inadequately assessed the risks assumed. A proper assessment of the credit risk on a supervisor’s demand revealed a full loss of the bank’s capital. Both management and owners of the credit institution did not take any effective measures to bring its activities back to normal. Under these circumstances based on Article 20 of the Federal Law ‘On Banks and Banking Activities’ the Bank of Russia fulfilled its duty to revoke the banking licence of Bank Credit-Moscow (PJSC).

By its Order No. OD-2340, dated 22 July 2016, the Bank of Russia has appointed a provisional administration to Bank Credit-Moscow (PJSC) 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.

Bank Credit-Moscow (PJSC) is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by legislation. The said Federal Law provides for the payment of indemnities to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of the balance of funds but not more than 1.4 million rubles per depositor.

According to reporting data, as of 1 July 2016, Bank Credit-Moscow (PJSC) ranked 285th in the Russian banking system in terms of assets.