On revocation of banking licence from credit institution Solidarnost and appointment of provisional administration
By its Order No. OD-3527, dated 15 December 2017, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Bank of trade-unions solidarity and social investment ‘Solidarnost’ or Bank ‘Solidarnost’ (Registration No. 1555) effective 15 December 2017.
The problems faced by Bank Solidarnost have resulted from its extremely risky business model and the low quality of the bigger portion of its assets. The bank’s business was focused on aggressive attraction of household funds and their placement into inferior quality assets.
The Bank of Russia has repeatedly applied supervisory measures to Bank Solidarnost, including restrictions (on two occasions) and a prohibition on the attraction of household funds. The bank regularly avoided meeting the supervisory authority’s demand to create loss provisions adequate to the risks assumed through technical asset transformation. Moreover, Bank Solidarnost committed multiple violations of restrictions to conduct certain operations introduced by the supervisory authority to protect the interests of creditors and depositors.
The absence of intentions, on the part of the bank’s owners, to take real measures to stabilise its financial situation pointed to the total uselessness of the further activities of this credit institution.
Under these circumstances, the Bank of Russia took the decision to withdraw Bank Solidarnost 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.
Following banking licence revocation, in accordance with Bank of Russia Order No. ОD-3527, dated 15 December 2017, Bank Solidarnost’s professional securities market participant licence was revoked.
By its Order No. OD-3528, dated 15 December 2017, the Bank of Russia has appointed a provisional administration to Bank Solidarnost 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.
Bank Solidarnost 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 01 December 2017, the credit institution ranked 185th by assets in the Russian banking system.
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15.12.2017 00.00.00