Banking licence of CB Holdinvestbank LLC revoked and provisional administration appointed
By its Order No. OD-959, dated 26 April 2019, the Bank of Russia revoked the banking licence from the Commercial Bank Holdinvestbank Limited Liability Company, or CB Holdinvestbank LLC (Registration No. 2837, Moscow Region, Odintsovsky District, working settlement Novoivanovskoye; hereinafter, Holdinvestbank). The credit institution ranked 421st by assets in the Russian banking system1.
The Bank of Russia took this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that Holdinvestbank:
- failed to comply with legislation and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism. The credit institution submitted to the authorised body incomplete and incorrect information, including on operations subject to mandatory control;
- conducted dubious transit operations;
- performed ‘scheme’ operations to artificially maintain its capital to formally comply with the required ratios;
- deliberately understated the amount of loan loss provisions to be set up. The Bank of Russia estimates that an adequate reflection in the credit institution’s financial statements of credit risks taken will lead to a significant (over 30%) decrease in capital and, consequently, to grounds to take measures to prevent the credit institution’s insolvency (bankruptcy), which creates a real threat to the interests of its 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 two impositions of restrictions on household deposit taking.
The main business line of Holdinvestbank was financing companies affiliated with the business of its key owner. That said, low-quality loans accounted for more than 90% of the loan portfolio.
The Bank of Russia appointed a provisional administration3 to Holdinvestbank for the period until the appointment of a receiver4 or a liquidator5. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Holdinvestbank 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). To obtain detailed information regarding the repayment procedure, depositors may call the Agency’s 24/7 hotline
1 According to the financial statements as of 1 April 2019.
2 The Bank of Russia made this decision because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within a year of the requirements stipulated by Article 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, as well as Bank of Russia regulations issued in pursuance thereof and repeated application within a year of measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, taking into account a real threat to the interests of creditors and depositors.
3 In accordance with Bank of Russia Order No. OD-960, dated 26 April 2019.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
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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