On the revocation of banking licence and appointment of provisional administration
By Order No. OD-226, dated 5 March 2014, the Bank of Russia revoked the banking licence of the Makhachkala-based Commercial Bank of Social Development Dagestan, a limited liability company (Dagestan Bank), from 5 March 2014.
The Bank of Russia took such an extreme measure — revocation of the banking licence — because of Dagestan Bank’s repeated violations over the past year of the requirements stipulated by Article 7 (excluding Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’.
Dagestan Bank failed to comply with the requirements of legislation on anti-money laundering and combatting the financing of terrorism in respect to proper identification of its customers and timely submitting to the authorised body data on operations subject to mandatory control. Dagestan Bank was involved in dubious transactions to issue cash to customer legal entities and individual entrepreneurs from their accounts. The amount of the aforementioned transactions totalled over 1.6 billion roubles in 2013. The bank failed to match its internal control rules with regard to countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism with Bank of Russia requirements.
In pursuance of Bank of Russia Order No. OD-227, dated 5 March 2014, a provisional administration has been appointed to Dagestan Bank for a term until the appointment of a receiver in accordance with the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ 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.
Dagestan Bank 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.
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05.03.2014 00.00.00