On the revocation of banking licence and appointment of provisional administration
By Order No. OD-910, dated 5 May 2014, the Bank of Russia revoked the banking licence of the Moscow-based Open Joint-Stock Company First Republican Bank (OJSC FRB) (Registration No. 1730) from 5 May 2014.
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, inability to satisfy its creditors’ claims on monetary liabilities, and taking into account the repeated application over the past year of supervisory measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
The bank implemented high-risk lending policy connected with the placement of funds into low-quality assets. Due to extremely poor quality of assets and subsequent insufficient cash flows, OJSC FRB has failed to timely honour its liabilities to creditors and depositors. The management and owners of the bank have not taken measures required to normalise its activities and recover its financial status. It was not feasible to conduct financial rehabilitation of OJSC FRB with the help of the state corporation Deposit Insurance Agency on reasonable economic terms. In these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of OJSC FRB in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
By its Order No. OD-911, dated 5 May 2014, the Bank of Russia has appointed a provisional administration to OJSC FRB for the period until the appointment of a receiver pursuant to the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies are suspended.
OJSC FRB is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by law.
As of 1 April 2014, OJSC FRB was ranked 109th by assets in the Russian banking system.
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05.05.2014 00.00.00