OREANDA-NEWS. By its Order No. OD-701, dated 2 April 2015, the Bank of Russia revoked the banking licence from the Podolsk-based credit institution closed joint-stock company Industrial Savings Bank or CJSC Promsberbank (Registration No. 1043, the Moscow Region) from 2 April 2015.

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, capital adequacy below 2%, decrease in equity capital below the minimal amount of the authoruised capital established as of the date of the state registration of the credit institution, and application of supervisory measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)'.

CJSC Promsberbank implemented high-risk lending policy connected with placement of funds into low-quality assets. As a result of meeting the supervisor's requirements on creating provisions adequate to the risks assumed, the credit institution lost its equity capital.

The management and owners of the credit institution did not take measures to normalise its activities. In these circumstances, pursuant to Article 20 of the Federal Law 'On Banks and Banking Activities', the Bank of Russia revoked the banking licence from the credit institution.

By its Order No. OD-702, dated 2 April 2015, the Bank of Russia has appointed a provisional administration to CJSC Promsberbank 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.

CJSC Promsberbank is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ 'On Insurance of Household Deposits with Russian Banks' regarding the bank's obligations on deposits of households determined in accordance with the legislation.

According to the financial statements, as of 1 March 2015, CJSC Promsberbank ranked 266thby assets in the Russian banking system.