24.11.2015, 23:40
Bank of Russia Revoked Licence from NOTA-Bank
OREANDA-NEWS. By its Order No. OD-3292, dated 24 November 2015, the Bank of Russia revoked the banking licence of the Moscow-based credit institution NOTA-Bank (Public joint-stock company) (Registration No. 2913) from 24 November 2015.
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, all capital adequacy ratios being below 2 percent, capital decrease below the authorised capital minimal value set by the Bank of Russia as of the date the credit institution was registered, and the repeated application within a year of the measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)'.
Since the creditors' monetary claims were not met, the provisional administration of NOTA-Bank (PJSC) appointed by Bank of Russia Order No. OD-2746, dated 13 October 2015, analysed the bank's financial standing including the assessment of its assets and found out that the bank's liabilities exceeded its assets by over 26 billion rubles not considering the risks arising from possible claims as regards guarantees execution in the amount over 8 billion rubles.
Considering low quality assets, taking into account the bank's liabilities to its depositors and the amount of insurance responsibility of the state corporation Deposit Insurance Agency (hereinafter, the Agency), any reasonable economic solution to avoid NOTA-Bank (PJSC) bankruptcy was out of the question. To recover the bank through a Bank of Russia loan with the Deposit Insurance Agency financial instruments of economic value equal to the value of deposit insurance liability - 2.6 billion rubles - a voluntary conversion of all bank's liabilities to legal entities in the amount of 95 percent in access of 1.4 million rubles in perpetual loan was needed. Subsequently, the bank creditors would have been unable to substantially reduce their losses caused by the bank's problems.
Given that, the Bank of Russia decided to go ahead with a procedure to settle NOTA-Bank (PJSC) liabilities to its creditors whose claims in accordance with bankruptcy legislation should be met on the first priority basis including those individuals with balances exceeding the amount of the earlier received insurance compensation following the Bank of Russia decision to introduce moratorium on the satisfaction of NOTA-Bank (PJSC) (hereinafter, the moratorium) creditors' claims. The amount of satisfied claims will be augmented by the interest accrued over the moratorium period at the rates set by Article 189.38 of the Federal Law 'On Insolvency (Bankruptcy).' Satisfaction of claims of other creditors will take place in the order established by legislation when NOTA-Bank bankruptcy proceedings are in progress.
In this connection, the Bank of Russia approved the Agency participation plan to settle NOTA-Bank (PJSC) liabilities which envisages the tender to be held by the Agency to select the assets and liabilities acquirer in the terms which will allow it to start servicing the NOTA-Bank (PJSC) first-priority creditors in bank locations (or in the same settlements) not later than 14 days after the approval of the Agency participation plan to settle the bank's liabilities.
By Bank of Russia Order No. OD-3293, dated 24 November 2015, following the revocation of NOTA-Bank (PJSC) banking licence and the Agency decision to join the settlement of the bank's liabilities, the functions of the provisional administration to manage this credit institution are vested into the hands of the Agency 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.
According to reporting data, as of 1 November 2015, NOTA-Bank (PJSC) ranked 97th in the Russian banking system in terms of assets.
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, all capital adequacy ratios being below 2 percent, capital decrease below the authorised capital minimal value set by the Bank of Russia as of the date the credit institution was registered, and the repeated application within a year of the measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)'.
Since the creditors' monetary claims were not met, the provisional administration of NOTA-Bank (PJSC) appointed by Bank of Russia Order No. OD-2746, dated 13 October 2015, analysed the bank's financial standing including the assessment of its assets and found out that the bank's liabilities exceeded its assets by over 26 billion rubles not considering the risks arising from possible claims as regards guarantees execution in the amount over 8 billion rubles.
Considering low quality assets, taking into account the bank's liabilities to its depositors and the amount of insurance responsibility of the state corporation Deposit Insurance Agency (hereinafter, the Agency), any reasonable economic solution to avoid NOTA-Bank (PJSC) bankruptcy was out of the question. To recover the bank through a Bank of Russia loan with the Deposit Insurance Agency financial instruments of economic value equal to the value of deposit insurance liability - 2.6 billion rubles - a voluntary conversion of all bank's liabilities to legal entities in the amount of 95 percent in access of 1.4 million rubles in perpetual loan was needed. Subsequently, the bank creditors would have been unable to substantially reduce their losses caused by the bank's problems.
Given that, the Bank of Russia decided to go ahead with a procedure to settle NOTA-Bank (PJSC) liabilities to its creditors whose claims in accordance with bankruptcy legislation should be met on the first priority basis including those individuals with balances exceeding the amount of the earlier received insurance compensation following the Bank of Russia decision to introduce moratorium on the satisfaction of NOTA-Bank (PJSC) (hereinafter, the moratorium) creditors' claims. The amount of satisfied claims will be augmented by the interest accrued over the moratorium period at the rates set by Article 189.38 of the Federal Law 'On Insolvency (Bankruptcy).' Satisfaction of claims of other creditors will take place in the order established by legislation when NOTA-Bank bankruptcy proceedings are in progress.
In this connection, the Bank of Russia approved the Agency participation plan to settle NOTA-Bank (PJSC) liabilities which envisages the tender to be held by the Agency to select the assets and liabilities acquirer in the terms which will allow it to start servicing the NOTA-Bank (PJSC) first-priority creditors in bank locations (or in the same settlements) not later than 14 days after the approval of the Agency participation plan to settle the bank's liabilities.
By Bank of Russia Order No. OD-3293, dated 24 November 2015, following the revocation of NOTA-Bank (PJSC) banking licence and the Agency decision to join the settlement of the bank's liabilities, the functions of the provisional administration to manage this credit institution are vested into the hands of the Agency 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.
According to reporting data, as of 1 November 2015, NOTA-Bank (PJSC) ranked 97th in the Russian banking system in terms of assets.
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