OREANDA-NEWS. In accordance with Bank of Russia Order No. OD-3258, dated 26 September 2016, a banking licence is revoked from the Moscow-based credit organisation Joint Stock Company Defence Industrial Bank, DIB (JSC), Reg. No. 3065, further referred to as the Bank, effective 26 September 2016.

The Bank of Russia took the extreme measure of licence revocation because of the credit institution’s failure to comply with federal banking legislation and Bank of Russia regulatory acts, as well as multiple violations, within one year, of requirements under Articles 6 and 7 (except for Paragraph 3, Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, requirements of Bank of Russia regulatory acts issued in accordance with this Federal Law, and due to the capital adequacy ratio falling below 2 percent, capital decrease below the minimal value of the authorised capital established as of the date of the state registration of the credit institution, and repeated applications, within one year, of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

While the quality of its assets was unsatisfactory, the Bank inadequately assessed its risks assumed. The appropriate assessment of its credit exposure, unbiased accounting of asset values in the credit institution’s statements reveals a total loss of bank capital. Also, the Bank failed to comply with Bank of Russia regulations as regards countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism as it failed to submit true and full information to the authorised body.

By its Order No. OD-3260, dated 26 September 2016, the Bank of Russia appointed a provisional administration to the Bank 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.

DIB JSC 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 September 2016, DIB JSC ranked 89th in the Russian banking system in terms of assets.