OREANDA-NEWS. The Bank of Russia revoked the banking licence of the Vologda -based credit institution Industrial Energy Bank, joint-stock company, or JSC Promenergobank (Registration No. 2728) from 5 August 2016.

JSC Promenergobank implemented a high-risk lending policy connected with the placement of funds in low-quality assets. An adequate assessment of the risks assumed and a reliable recognition of the bank’s assets resulted in the grounds for the credit institution to implement measures to prevent the bank’s insolvency (bankruptcy). Besides, due to the loss of liquidity the credit institution allowed untimely satisfaction of liabilities to creditors. The management and owners of the bank did not take effective measures to normalise its activities. Under the circumstances the Bank of Russia took a decision to withdraw JSC Promenergobank off the banking services market.

By its Order No. OD-2525, dated 5 August 2016, the Bank of Russia

has appointed a provisional administration to JSC Promenergobank 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.

JSC Promenergobank 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 law.

According to financial statements, as of 1 July 2016, JSC Promenergobank ranked 364th by assets in the Russian banking system.