OREANDA-NEWS. By its Order No. OD-376, dated 5 February 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Commercial Bank Millenium Bank, closed joint-stock company, or Millenium Bank CJSC (Registration No. 3423) from 5 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, equity (capital) adequacy ratios below 2 per cent, decrease in bank capital below the minimum value of the authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution, inability to meet creditors’ claims on monetary obligations, and due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

With its poor asset quality Millenium Bank CJSC failed to adequately assess the risks assumed. Due credit risk assessment as requested by the supervisory authority revealed that the bank lost its equity (capital). Besides, due to the loss of liquidity the credit institution failed to meet its obligations to creditors on a timely basis.

The management and owners of the credit institution did not take effective measures to normalise its activities. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.

By its Order No. OD-377, dated 5 February 2016, Bank of Russia has appointed a provisional administration to Millenium Bank CJSC 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.

Millenium Bank CJSC is a member of the deposit insurance system. The revocation of the 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 liabilities on deposits of households determined in accordance with the legislation. The said Federal Law stipulates the insurance premium as one hundred per cent reimbursement of the entire deposit to bank depositors, including individual entrepreneurs, but not more than 1.4 million rubles in aggregate per depositor.

According to the financial statements, as of 1 January 2016, Millenium Bank CJSC ranked 282nd by assets in the Russian banking system.