Banking licence of JSC CB Assotsiatsiya Bank revoked
By its Order No. OD-1758, dated 29 July 2019, the Bank of Russia revoked a banking licence from the Nizhny Novgorod-based credit institution Joint-stock Company Commercial Bank Assotsiatsiya, or JSC CB Assotsiatsiya (Registration No. 732, hereinafter, Bank Assotsiatsiya). The credit institution ranked 170th by assets in the Russian banking system1.
The Bank of Russia took this decision in accordance with Clause 6, Part 1 and Clauses 1 and 2, Part 2, Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that Bank Assotsiatsiya:
- admitted the absence of funds in accounts with a foreign bank, which were reflected in financial reports. Creation of additional required loss provisions for actually non-existent assets led to a complete loss of capital by the credit institution;
- violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the past 12 months, including the imposition of restrictions on household deposit taking.
As part of ongoing supervision, the Bank of Russia established the fact of absence of funds in the amount of over 3.8 billion rubles in accounts of Bank Assotsiatsiya with a foreign bank, which exceeds its equity capital more than twofold. The management of the credit institution admitted the absence of the above-mentioned funds. The regulator issued an order to Bank Assotsiatsiya to create additional loss provisions for actually missing claims on a foreign bank in the amount of 100%. According to the latest financial statements submitted by the bank, its capital was completely lost.
The Bank of Russia will submit information about the bank’s transactions suggesting a criminal offence to law enforcement agencies.
The Bank of Russia appointed a provisional administration3 to Bank Assotsiatsiya 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: Bank Assotsiatsiya 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). Detailed information regarding the repayment procedure can be obtained 24/7 at the Agency’s hotline
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1 According to the financial statements as of 1 July 2019.
2 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, all 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)’.
3 In accordance with Bank of Russia Order No. OD-1759, dated 29 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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