On revocation of banking licence of BOOM-BANK LLC and appointment of provisional administration
By its Order No. OD-1374, dated 01.06.2018, the Bank of Russia revoked the banking licence of the Nalchik-based credit institution Commercial Bank BOOM-BANK LLC, or BOOM-BANK LLC (Registration No. 1137), further also referred to as the credit institution. According to its financial statements, as of 01.05.2018, the credit institution ranked 380th by assets in the Russian banking system.
With the credit institution’s operations based on a risky business model mainly focused on retail lending, there emerged multiple assets of questionable quality on its balance sheet. The credit institution’s funding base was essentially made up of households’ funds.
Also, the credit institution’s operations were found to be non-compliant with the law and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism with regard to the accuracy of information the credit institution submitted to the authorised body including about operations subject to obligatory control. Moreover, the bank was involved in suspicious transit operations in the second half of 2017.
The Bank of Russia repeatedly applied supervisory action against the credit institution including the imposition of restrictions on household deposit taking.
The management and owners of the bank failed to take any 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 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 Articles 7 (except for Clause 3 of Article 7) and 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and the requirements of Bank of Russia regulations issued in compliance with the indicated Federal Law, 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)’.
By its Order No. OD-1375, dated 01.06.2018, the Bank of Russia appointed a provisional administration to the credit institution 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 were suspended.
BOOM-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.
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