OREANDA-NEWS. February 05, 2016. By Order No. OD-328, Bank of Russia revoked the banking licence of the Moscow-based credit institution International Joint-Stock Bank, closed joint-stock company (IJS Bank CJSC) (Registration No. 1987) from 3 February 2016.

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. The bank’s capital adequacy ratios fell below 2%, its equity capital dropped below the minimum amount of the authorised capital established as of the date of state registration of the credit institution and also the bank was subject to repeated application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ over the past year.

IJS Bank CJSC violated banking laws and Bank of Russia regulations while assessing credit risk. As a result of the credit institution’s compliance with the supervisor’s requirements to make loan loss provisions adequate to risks assumed, a full loss of its equity capital was revealed.

Due to the low quality of the bank’s assets it was unfeasible to apply financial resolution measures to IJS Bank CJSC with the involvement of the state corporation Deposit Insurance Agency. Under these circumstances, the Bank of Russia guided by Article 20 of the Federal Law ‘On Banks and Banking Activities’ fulfilled its duty and revoked the banking licence from the credit institution.

In pursuance of Bank of Russia Order No. OD-329, dated 3 February 2016, a provisional administration has been appointed to IJS Bank CJSC for a term until the appointment of a receiver in accordance with the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator in accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In compliance with federal laws the powers of the credit institution’s executive bodies have been suspended.

IJS Bank CJSC is a participant in the deposit insurance system. The revocation of the banking licence is recognised as an insured event stipulated by Federal Law No. 177-FZ ‘On Insurance of Household Deposits in Russian Banks’ with regard to the bank’s obligations on household deposits identified in accordance with the procedure established by law. 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 no more than 1.4 million rubles per one depositor.

According to reporting data, as of 1 January 2016 IJS Bank CJSC ranked 207th in the Russian banking system in terms of assets.