On revocation of banking licence of credit institution BaikalBank and appointment of provisional administration
By its Order No. OD-2675, dated 18 August 2016, the Bank of Russia revoked the banking licence from the Ulan-Ude-based credit institution BaikalBank, public joint-stock company, or BaikalBank PJSC (Registration No. 2632) from 18 August 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, equity capital adequacy ratios below two per cent, decrease in bank equity capital below the minimum value of the authorised capital established as of the date of the state registration of the credit institution, given the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
BaikalBank PJSC placed funds in low quality assets and inadequately assessed risks assumed. As a result of meeting the supervisor’s requirements on due assessment of credit risks taken, the credit institution fully lost its equity capital.
The management and owners of BaikalBank PJSC did not take effective measures to normalise its activities and their declaratory measures to restore financial stability did not achieve satisfactory result. Moreover, in August this year, given the limitations placed on BaikalBank PJSC by the supervisor, the management and owners of the bank performed schemed operations and transactions, aimed at diverting the bank’s assets.
Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of BaikalBank PJSC in accordance with Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’.
By its Order No. OD-2676, dated 18 August 2016, the Bank of Russia has appointed a provisional administration to BaikalBank PJSC 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 are suspended.
BaikalBank PJSC 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 August 2016, BaikalBank PJSC ranked 230th by assets in the Russian banking system.
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18.08.2016 00.00.00