OREANDA-NEWS. By its Order No. OD-378, dated 5 February 2016, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Commercial Bank REGNUM (limited liability company) or REGNUM BANK (LLC) (Registration No. 3373) from 5 February 2016.

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, revealed facts of considerable unreliability of the reporting data and taking into account the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

The credit institution implemented high-risk lending policy connected with the placement of funds into low-quality assets. Adequate assessment of risks assumed and true reflection of the bank’s assets value lead to a total loss of its capital. At the same time, REGNUM BANK (LLC) did not comply with the supervisor’s requirements to create loss provisions adequate to the risks assumed and to submit statements reflecting the bank’s real financial standing. There existed grounds for the revocation of the banking licence. Also, the bank was involved in dubious transit operations.

Both management and owners of the bank did not take any effective measures to bring its activities back to normal. Under these circumstances, the Bank of Russia took a decision to revoke the banking licence of REGNUM BANK (LLC).

By its Order No. OD-379, dated 5 February 2016, the Bank of Russia has appointed a provisional administration to REGNUM BANK (LLC) 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.

REGNUM BANK (LLC) 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 January 2016, REGNUM BANK (LLC) ranked 586th in the Russian banking system in terms of assets.