OREANDA-NEWS. By its Order No. OD-2403, dated 28 July 2016, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Joint-stock Commercial Bank Terra, closed joint-stock company, or JSCB Terra CJSC (Registration No. 3476) from 28 July 2016.

The Bank of Russia took such an extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, due to the application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ interests.

JSCB Terra CJSC placed funds in low quality assets and inadequately assessed risks assumed. Due to the fulfilment of repeated requests of the supervisor to create required loan loss provisions the credit institution was facing grounds for measures to prevent its solvency (bankruptcy). The management and owner of the credit institution did not take effective measures to normalise its activities. Under these circumstances, the Bank of Russia took a decision to revoke the banking licence of the credit institution JSCB Terra CJSC.

By its Order No. OD-2404, dated 28 July 2016, the Bank of Russia has appointed a provisional administration to JSCB Terra CJSC 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 the financial statements, as of 01 July 2016, JSCB Terra CJSC ranked 593rd by assets in the Russian banking system.