OREANDA-NEWS. September 10, 2015. By its Order No. OD-2371 the Bank of Russia revoked the banking licence from the Roslavl-based credit institution public joint-stock company Commercial Bank Smolevich or PJSC Bank Smolevich (Registration No. 1121, the Smolensk Region).

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)’.

PJSC Bank Smolevich implemented high-risk 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-2372, dated 8 September 2015, the Bank of Russia has appointed a provisional administration to PJSC Bank Smolevich 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.

PJSC Bank Smolevich 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 August 2015, PJSC Bank Smolevich ranked 548th by assets in the Russian banking system.