On revocation of banking licence of the credit institution StarBank and appointment of provisional administration
By its Order No. OD-920, dated 18 March 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution StarBank, joint-stock company, or JSC StarBank (Registration No. 548) from 18 March 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, 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.
JSC StarBank implemented high-risk lending policy and failed to create loan loss provisions adequate to the risks assumed. At the same time the credit institution failed to meet the supervisor’s instructions on prohibiting certain operations to protect interests of the bank’s depositors. Besides, the bank was involved in dubious operations to withdraw funds overseas as well as in dubious transit operations. The management and owners of JSC StarBank did not take effective measures to normalise its activities.
By its Order No. OD-921, dated 18 March 2016, the Bank of Russia has appointed a provisional administration to JSC StarBank 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.
JSC StarBank 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 March 2016, JSC StarBank ranked 166th by assets in the Russian banking system.
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