On revocation of banking licence of credit institution M2M Private Bank and appointment of provisional administration
By its Order No. OD-4398, dated 9 December 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Public Joint-Stock Company M2M Private Bank, or PJSC M2M Private Bank (Registration No. 1414) from 9 December 2016.
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, failure to satisfy creditors’ claims on financial liabilities and the repeated application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ over the year.
PJSC M2M Private Bank placed funds in low quality assets and did not establish reserves adequate to the risks assumed. Due to the low quality of assets, the credit institution failed to fulfill its liabilities to creditors and under such circumstances, in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’, the Bank of Russia performed its duty and revoked the banking licence.
By its Order No. OD-4399, dated 9 December 2016, the Bank of Russia appointed a provisional administration to PJSC M2M Private Bank for the period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ 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.
PJSC M2M Private Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
According to the financial statements, as of 1 November 2016, PJSC M2M Private Bank ranked 164th by assets in the Russian banking system.
PJSC Asian-Pacific Bank has owned 100% of PJSC M2M Private Bank’s shares since July 2016 and has supported it by providing liquidity. In October 2016, the Bank of Russia placed restrictions on lending to PJSC M2M Private Bank by PJSC Asian-Pacific Bank and stopped further spending of the capital and liquidity of the latter. By doing so, the Bank of Russia put an end to the PJSC Asian-Pacific Bank’s spending on the support of PJSC M2M Private Bank, averted the threat to financial stability of the parent bank and improved the protection of its creditors and depositors.
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