On revocation of banking licence of Non-banking Credit Organisation CreditAlliance and appointment of provisional administration

In accordance with its Order No. OD-1795, dated 8 June 2016, the Bank of Russia revokes the banking licence of Non-banking Credit Organisation CreditAlliance, Limited Liability Company (Reg. No. 3472-K, the City of Vologda), effective 8 June 2016.

The Bank of Russia took the extreme decision of banking licence revocation following the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, recurrent violations, in the course of one year, of the Bank of Russia regulations issued in accordance with Federal Law No. 115-FZ, dated 7 August 2001, ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ because the capital adequacy ratio dropped below the level of two per cent, because the capital fell below the minimal amount established for the credit institution registration date and taking into account the repeated actions under the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

While its assets quality was low, the credit organisation failed to evaluate the risks involved. The appropriate risk assessment, conducted in accordance with the supervisor’s requirement, found complete loss of capital of the credit institution. Also, the lender failed to comply with the Bank of Russia regulatory acts in the field of countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism insofar as the latter failed to make reliable submittals to the competent authority. Additionally, the credit institution was involved in non-cash and cash operations of a dubious nature.

No action was taken by the lender’s executive management or owners to normalise its operations. In the current environment, the Bank of Russia, guided by Article 20 of the Federal Law ‘On Banks and Banking Activity’, accomplishes its duty and withdraws a banking licence from the credit organisation.

In accordance with Bank of Russia No. OD-1796, dated 8 June 2016, a provisional administration was appointed to Non-banking Credit Organisation CreditAlliance, to manage the credit institution until the time a receiver or a liquidator is appointed in accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activity’. In accordance with federal laws, the powers of the credit institution’s executive bodies have been suspended.

According to statements, as of 1 May 2016, the credit institution Non-banking Credit Organisation CreditAlliance was ranked 680^th in the Russian banking system by assets.

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08.06.2016 00.00.00