Banking licence of CB Zhilcredit LLC revoked and provisional administration appointed
By its Order No. OD-1672, dated 19 July 2019, the Bank of Russia revoked the banking licence from Housing Credit Commercial Bank Zhilcredit Limited Liability Company, or CB Zhilcredit LLC (Registration No. 1736, Moscow; hereinafter, Bank Zhilcredit). The credit institution ranked 420th by assets in the Russian banking system.1
The Bank of Russia took this decision in accordance with Clause 6, Part 1, Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that Bank Zhilcredit:
- became incapable to timely honour its obligations to creditors due to liquidity loss after the recovery of a large sum of money as part of execution of a court order. These expenses also led to a significant (over 35%) decrease in capital and, consequently, to grounds to take insolvency (bankruptcy) prevention measures; this created a real threat to interests of bank’s creditors and depositors;
- violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the past 12 months, including the impositions of restrictions on household deposit taking.
Principal assets of Bank Zhilcredit were represented by illiquid non-core property. Therefore, cash flows generated by the credit institution did not allow it to timely honour its obligations to creditors.
The Bank of Russia appointed a provisional administration3 to Bank Zhilcredit for the period until the appointment of a receiver4 or a liquidator.5 In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Bank Zhilcredit is a participant in the deposit insurance system, therefore depositors6 will be compensated for their deposits in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor (including interest accrued).
Deposits are repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). For details of the repayment procedure, depositors may call the Agency’s 24/7 hotline
1 According to the financial statements as of 1 July 2019.
2 The Bank of Russia took this decision 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.
3 In accordance with Bank of Russia Order No. OD-1673, dated 18 July 2019.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
6 Depositors mean individuals, including those who are engaged in entrepreneurial activity (individual entrepreneurs), and legal entities that are considered small businesses in accordance with the Federal Law ‘On the Development of Small and Medium-sized Enterprises in the Russian Federation’.
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