Press Service

On revocation of banking licence of credit institution Siberian Bank for Reconstruction and Development and appointment of provisional administration

By its Order No. OD-280, dated 6 February 2018, the Bank of Russia revoked the banking licence of the Tyumen-based credit institution Siberian Bank for Reconstruction and Development (Limited Liability Company), or Bank SBRD (LLC) (Registration No. 1284) from 6 February 2018. According to the financial statements, as of 1 January 2018, the credit institution ranked 322^th by assets in the Russian banking system.

The credit institution’s financial standing has deteriorated considerably due to large securities transactions aimed at replacing liquid assets with knowingly bad ones during the last ten days of January and as a result of missing valuables in large amount from the bank’s till. Creation of required loss provision for actually missing assets at the request of the supervisory authority revealed a full loss of equity capital by the credit institution. Currently, Bank SBRD (LLC) has in fact ceased all operations. Therefore, the credit institution’s operations showed signs of misconduct by the management who conducted transactions aimed at the withdrawal of liquid assets to the detriment of creditors’ and depositors’ interests.

The Bank of Russia has repeatedly applied supervisory measures against Bank SBRD (LLC), which included restrictions (on two occasions) and a ban on household deposit taking.

Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.

The Bank of Russia took such an extreme measure because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, equity capital adequacy ratios below two per cent, decrease in the bank’s equity capital below the minimum value of the authorised capital established as of the date of the state registration of the credit institution, and given the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

Following banking licence revocation, in accordance with Bank of Russia Order No. ОD-280, dated 6 February 2018, Bank SBRD (LLC)’s professional securities market participant licence was revoked.

By its Order No. OD-281, dated 6 February 2018, the Bank of Russia has appointed a provisional administration to Bank SBRD (LLC) 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.

Bank SBRD (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. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by law. The said Federal Law provides for the payment of indemnities to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor.