On revocation of banking licence and appointment of provisional administration

By Order No. OD-2979, dated 2 November 2015, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Joint-stock Commercial Bank Benefit-bank, closed joint-stock company (JSCB Benefit-bank CJSC) (Registration No. 3229) from 2 November 2015.

The Bank of Russia took such an extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations. The bank was subject to measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ due to the threat posed to the interests of creditors and depositors.

JSCB Benefit-bank CJSC implemented high risk credit policy and failed to make loan loss provisions adequate to risks assumed. The credit institution failed to comply with the supervisor’s requirements to provide reliable information about its financial standing, thus concealing a considerable loss of equity capital and grounds for measures to prevent insolvency (bankruptcy). Moreover, starting October 2015 the Bank of Russia received complaints from the bank’s depositors about its failure to return funds. The management and owners of the credit institution failed to take effective measures to bring the situation back to normal.

In pursuance of Bank of Russia Order No. OD-2980, dated 2 November 2015, a provisional administration has been appointed to JSCB Benefit-bank CJSC for a term until the appointment of a receiver in accordance with the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator in accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In compliance with federal laws the powers of the credit institution’s executive bodies have been suspended.

JSCB Benefit-bank CJSC is a participant in the deposit insurance system. The revocation of the banking licence is recognised as an insured event stipulated by Federal Law No. 177-FZ ‘On Insurance of Household Deposits in Russian Banks’ with regard to the bank’s obligations to honour household deposits identified in accordance with the procedure established 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 1.4 million rubles per one depositor.

According to reporting data, as of 1 October 2015 JSCB Benefit-bank CJSC ranked 224^th in the Russian banking system in terms of assets.

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02.11.2015 00.00.00