On the revocation of banking licence and appointment of provisional administration
By Order No. OD-332, dated 18 March 2014, the Bank of Russia revoked the banking licence of the Moscow-based non-bank credit institution MIGOM, a closed joint-stock company (CJSC MIGOM), from 18 March 2014.
The Bank of Russia took such an extreme measure — revocation of the banking licence — because of CJSC MIGOM’s failure to comply with federal banking laws and Bank of Russia regulations. The capital adequacy ratio of this credit institution is below 2%, while its equity capital has dropped down below the minimum authorised capital established by the Bank of Russia as of the day of the state registration of the credit institution. Moreover, CJSC MIGOM is unable to satisfy creditors’ claims on its pecuniary liabilities. While making this decision the Bank of Russia also took into account the repeated application over the past year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’. In compliance with Article 20 of the Federal Law ‘On Banks and Banking Activities’, the Bank of Russia has performed its duty to revoke the banking licence of CJSC MIGOM.
CJSC MIGOM has actually ceased its activity and failed to meet its obligations to creditors on time. In addition, CJSC MIGOM failed to make loss provisions commensurate with the risks caused by the placement of a considerable amount of funds with Eurotrust Commercial Bank (Closed Joint-Stock Company) whose banking licence had been revoked by the Bank of Russia by Order No. OD-143, dated 11 February 2014. Following the fulfillment of the supervisor’s requirements to make adequate provisions, CJSC MIGOM lost its equity capital in full. The management and owners of the credit institution failed to take measures on its financial rehabilitation.
In pursuance of Bank of Russia Order No. OD-333, dated 18 March 2014, a provisional administration has been appointed to the credit institution for a term until the appointment of a receiver in accordance with the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ or a liquidator in accordance with Artcile 23.1 of the Federal Law ‘On Banks and Banking Activities’. In compliance with federal laws the powers of the credit institution’s executive bodies have been suspended.
As of 1 March 2014, CJSC MIGOM ranked 830th in the Russian banking system in terms of assets.The reference to the Press Service is mandatory if you intend to use this material.