Banking licence of Nefteprombank revoked

By its Order No. OD-618, dated 9 April 2021, the Bank of Russia revoked the banking licence of the Moscow-based Joint Stock Oil-Industrial Investment Commercial Bank, or Nefteprombank (Registration No. 2156, hereinafter, Nefteprombank). The credit institution ranked 201^st by assets in the Russian banking system.¹

The Bank of Russia made this decision in accordance with Clause 6 of Part 1 and Clause 1 of Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,² based on the facts that Nefteprombank:

• lost its equity;
• conducted operations that suggest the intention to siphon off assets.
• 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

High-risk lending policy pursued by Nefteprombank over 2020–2021 resulted in a considerable portion of potentially unrecoverable household loans on the credit institution’s balance sheet. The said retail lending transactions had signs of attempts to siphon off funds, prejudicing the interests of creditors and depositors. The Bank of Russia repeatedly sent orders to Nefteprombank to create additional loss provisions. Compliance with the above orders revealed the actual loss of equity by the bank.

The Bank of Russia will submit the information on the bank’s transactions having signs of criminal offences to law enforcement agencies.

The Bank of Russia also cancelled Nefteprombank’s professional securities market participant licence.

The Bank of Russia appointed a provisional administration⁴ to Nefteprombank 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: Nefteprombank 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 (8 800 200-08-05) and on its website (https://www.asv.org.ru/) in the Deposit Insurance / Insurance Events section.

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 its capital adequacy ratios below two per cent, 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-619, dated 9 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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09.04.2021 00.00.00