On revocation of banking licence of the credit institution Premier Credit Bank and appointment of provisional administration
By its Order No. OD-1907, dated 10 July 2017, the Bank of Russia revoked the banking licence of the Moscow-based credit institution public joint-stock company Premier Credit Bank Incorporated or Premier Credit Bank Inc. (Registration No. 1663) from 10 July 2017. According to the financial statements, as of 1 June 2017, the credit institution ranked 369th by assets in the Russian banking system.
The activities of Premier Credit Bank Inc. are characterised by the low quality of assets. Considerable portion of the credit portfolio consists of outstanding loans of borrowers bearing the signs of shell companies. As the credit institution has consistently underestimated credit risk assumed, the Bank of Russia has repeatedly requested that it create additional provisions for possible losses. The high-risk credit policy pursued by Premier Credit Bank Inc. has led to the emergence of grounds in its operations for regulatory measures to be taken to prevent its failure (bankruptcy), and has put its creditors’ and depositors’ interests under real threat. Besides, due to the loss of liquidity the credit institution failed to timely honour its obligations to creditors.
The Bank of Russia repeatedly applied supervisory measures to Premier Credit Bank Inc., including restrictions on household deposit taking.
The management and owners of the bank failed to take effective measures to normalise its activities. Under the circumstances, the Bank of Russia has made the decision to withdraw Premier Credit Bank Inc. from the banking services market.
The Bank of Russia takes this 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, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.
By its Order No. OD-1908, dated 10 July 2017, the Bank of Russia has appointed a provisional administration to Premier Credit Bank Inc. for the period until the appointment of a receiver pursuant to the Federal Law ‘On the 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 have been suspended.
Premier Credit Bank Inc. is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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