On revocation of banking licence from CB Alzhan and appointment of provisional administration
By its Order No. OD-539, dated 2 March 2018, the Bank of Russia revoked the banking licence of the Makhachkala-based credit institution Commercial Bank Alzhan Limited Liability Company, or CB Alzhan LLC (Registration No. 2491), further also referred to as the credit institution. According to its financial statements, as of 1 February 2018, the credit institution ranked 517th by assets in the Russian banking system. The credit institution is not a member of the deposit insurance system.
The major transactions the credit institution conducted in the second half of February this year, aimed to replace a considerable part of assets, resulted in the loss of liquidity and the credit institution’s failure to timely honour its obligations to creditors; this led to the emergence of grounds for regulatory measures to prevent its failure (bankruptcy). It was further revealed that the credit institution repeatedly violated the requirements of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ in respect of the completeness and reliability of information submitted to the authorised body, on operations subject to mandatory control.
The management and owners of the bank failed to take effective measures to normalise its activities. In addition, their behaviour was unscrupulous: they withdrew assets to the detriment of creditors’ interests. Under the circumstances the Bank of Russia took the decision to withdraw CB Alzhan Limited Liability Company from the banking services market.
The Bank of Russia took this decision due the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within one year of the requirements stipulated by Article 7 (except for Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ and taking into account repeated applications within one year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’; the decision was also made taking into account a real threat to the interests of creditors.
By its Order No. OD-540, dated 2 March 2018, the Bank of Russia appointed a provisional administration to CB Alzhan Limited Liability Company 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 have been suspended.
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