Press Service

On revocation of banking licence from credit institution Informprogress and appointment of provisional administration

By its Order No. OD-1236, dated 15.05.2017, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Commercial Bank of Assistance for Development of Trade and Supply Informprogress (limited liability company) or CB Informprogress LLC (Registration No. 2166) from 15.05.2017. According to the financial statements, as of 01.04.2017, the credit institution ranked 575^th by assets in the Russian banking system.

The business model of CB Informprogress LLC was largely designed to serve the interests of its owners. The bank placed funds in low-quality assets, including in construction, and inadequately assessed the risks assumed. Following the creation of required loss provisions, the credit institution’s equity capital fell below the amount of its registered authorised capital. CB Informprogress LLC failed to timely comply with the Bank of Russia’s instruction on aligning its authorised and equity capital.

The Bank of Russia repeatedly applied supervisory measures to the credit institution, including restrictions on household deposit taking.

The management and owners of CB Informprogress LLC have not taken effective measures to bring its activities back to normal. 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’s decision resulted from the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, its failure to meet the Bank of Russia’s demand to align its authorised and equity capital within the timeframe stipulated in paragraph 4.1 of Chapter IX of the Federal law ‘On Insolvency (Bankruptcy)’, and given the repeated application over the past year of supervisory measured envisaged by the Federal law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

By its Order No. OD-1237, dated 15.05.2017, the Bank of Russia has appointed a provisional administration to CB Informprogress 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 are suspended.

CB Informprogress 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 one depositor.