OREANDA-NEWS. The Bank of Russia revoked a banking licence of the Saint Petersburg-based credit institution Joint-stock company Joint-stock Commercial Bank Konstans-Bank or JSC JSCB Konstans-Bank (Registration No. 2228) from 5 August 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.

The Bank of Russia has detected a big cash deficiency in JSC JSCB Konstans-Bank cash department. Creation of loan loss reserves to cover de facto missing assets of the credit institution resulted in a complete loss of its capital. Besides, the bank was involved in dubious transit operations. Both management and owners of the credit institution did not take any effective measures to bring its activities back to normal. 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’.

The Bank of Russia has appointed a provisional administration to JSC JSCB Konstans-Bank for the period until or a liquidator. In accordance with federal laws, the powers of the credit institution’s executive bodies are suspended.

JSC JSCB Konstans-Bank 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.

According to reporting data, as of 1 July 2016, JSC JSCB Konstans-Bank ranked 387th in the Russian banking system in terms of assets.