Banking licence of Moskva revoked and provisional administration appointed
By its Order No. OD-2955, dated 14 November 2018 and effective from the same date, the Bank of Russia revoked a banking licence from the Moscow-based credit institution Regional Joint-stock Commercial Bank Moskva (Registration No. 1661), further also referred to as the credit institution. According to its financial statements, as of 1 November 2018, the credit institution ranked 431st by assets in the Russian banking system.
The credit institution’s operations were on multiple instances found to be non-compliant with Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism (AML/CFT) with regard to the completeness and reliability of information provided to the authorised body about operations subject to mandatory control.
The second quarter of the year saw a manyfold rise in the volume of the credit institution-conducted questionable transit operations, of which roughly half were transactions related to retail companies’ shadow sales of cash receipts to third parties. The Bank of Russia’s interactions with the credit institution aimed at improving its anti-money laundering processes failed to result in appropriate corrections to its business model. Moreover, several facts constituted evidence for the credit institution’s deliberate involvement in the conduct of suspicious transactions, with its executives and shareholders having no intention to take effective action towards stopping such operations.
The Bank of Russia repeatedly (3 times over the last 12 months) applied supervisory measures against Moskva, including supervisory action for non-compliance with AML/CFT regulations.
Under these circumstances, the Bank of Russia took the decision to revoke Regional Joint-stock Commercial Bank Moskva’s banking licence.
The Bank of Russia took this measure following the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations, within a year, of Bank of Russia regulations issued in accordance with the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and multiple applications within one year of measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
Following banking licence revocation, Moskva’s professional securities market participant licence was cancelled.
By its Order No. OD-2956, dated 14 November 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.
Regional Joint-stock Commercial Bank Moskva is a member of the deposit insurance system. The revocation of a banking licence is an insured event as stipulated by Federal Law ‘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.
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