On revocation of banking licence from credit institution International Fund Bank and appointment of provisional administration
By its Order No. OD-2852, dated 4 October 2017, effective 4 October 2017, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Commercial Bank International Fund Bank Limited Liability Company (Registration No. 3163), further referred to as the credit institution. According to the financial statements, as of 1 September 2017, the credit institution ranked 327th by assets in the Russian banking system.
The problems in the credit institution’s operations owe their existence to the extremely risky business model, which led to the emergence on the credit institution’s balance sheet of heavy debts of entities which appear to conduct no real business operations. The credit institution regularly understated the accepted credit risk and avoided meeting the supervisory authority’s demand to create loss provisions — through technical asset transformation. Currently, the credit institution as such has ceased its activities, while its financial standing is marked by extremely low asset quality and the presence of elevated risks stemming from total loss of control and the management’s unscrupulous action. Of note is the management’s ignorance of the supervisory authority’s demands and its actions suggesting deliberate bankruptcy.
The Bank of Russia repeatedly applied supervisory measures to the credit institution, including three impositions of restrictions on household deposit taking. The management and owners of the bank failed to take effective measures to normalise its activities. As it stands, the Bank of Russia took the decision to withdraw the credit institution from the banking services market.
The Bank of Russia takes this 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, 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)’, considering a real threat to the creditors’ and depositors’ interests.
By its Order No. OD-2853, dated 4 October 2017, the Bank of Russia has appointed a provisional administration to 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 have been suspended.
Commercial Bank International Fund Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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