On revocation of banking licence of Tagilbank and appointment of provisional administration
By its Order No. OD-1828, dated 20 July 2018, the Bank of Russia revoked the banking licence of the Nizhny Tagil-based credit institution Joint Stock Company Tagilbank or JSC Tagilbank (Registration No. 1635, Sverdlovsk Region) from 20 July 2018. According to financial statements, as of 1 July 2018, the credit institution ranked 409th by assets in the Russian banking system; its impact on the aggregate indexes of the banking sector of the Sverdlovsk Region was unsubstantial.
The activity of JSC Tagilbank was unprofitable for a long time due to low efficiency of its business model. Moreover, supervisory measures taken by the regulator revealed property recorded in the balance sheet of the credit institution at a substantially elevated value. The due diligence check of the value of the specified assets conducted at the regulator’s request revealed significant deterioration of the bank’s indicators, thus reflecting the need for action to prevent its insolvency (bankruptcy) and, consequently, a real threat to its creditors’ and depositors’ interests.
The Bank of Russia had repeatedly (4 times over the last 12 months) applied supervisory measures against JSC Tagilbank including restriction on household deposit taking.
The credit institution’s management and owners failed to take effective measures to normalise its activities. Under these circumstances, the Bank of Russia took the decision to revoke JSC Tagilbank’s banking licence.
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-1829, dated 20 July 2018, the Bank of Russia has appointed a provisional administration to JSC Tagilbank 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 were suspended.
JSC Tagilbank 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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