Banking licence of CB Geobank LLC revoked
By its Order No. OD-534, dated 2 April 2021, the Bank of Russia revoked the banking licence of the Moscow-based Commercial Bank Geobank (Limited Liability Company), CB Geobank LLC (Registration No. 2027; hereinafter, Geobank). The credit institution ranked 354th by assets in the Russian banking system.1
The Bank of Russia made this decision in accordance with Clause 6 of Part 1 and Clauses 1 and 2 of Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that Geobank:
- fully lost its equity;
- violated federal banking laws and Bank of Russia regulations, due to which the regulator repeatedly applied measures against it over the past 12 months including restrictions on household deposit-taking.3
For its core activities, Geobank used premises leased under repeatedly extended agreements, which were qualified as short-term and were recorded on the balance sheet with the violation of the requirements of Bank of Russia regulations. Moreover, the credit institution did not recognise expenses incurred by the said operations in its accounting in a timely manner. Compliance with the supervisor’s requirements to recognise the leasing agreements as long-term agreements and to properly record associated expenses revealed a full loss of equity by Geobank.
The Bank of Russia appointed a provisional administration4 to Geobank for the period until the appointment of a receiver5 or a liquidator.6 In accordance with federal laws; the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Geobank is a participant in the deposit insurance system; therefore depositors 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), except the cases stipulated by Chapter 2.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’.
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). Depositors may obtain detailed information regarding the repayment procedure 24/7 at the Agency’s hotline
1 According to the financial statements as of 1 March 2021.
2 The Bank of Russia made this decision due to the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, all capital adequacy ratios below two per cent, decrease in the bank’s 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 Depositor — a citizen of the Russian Federation, foreign citizen or person without citizenship, including those engaged in entrepreneurial activity, or a legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’ which concluded a bank deposit/account agreement with a bank, or any of the above mentioned persons in whose favour the deposit was made and (or) who is the holder of a savings certificate, or the owner of a special account (special deposit) intended to form and use the fund of capital repairs of common property in an apartment house opened in accordance with the requirements of the Housing Code of the Russian Federation.
4 In accordance with Bank of Russia Order No. OD-535, dated 2 April 2021.
5 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
6 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
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02.04.2021 00.00.00