On Financial-Rehabilitation Measures against JSCB MOSOBLBANK OJSC, INRESBANK LLC and LLC CB Finance Business Bank
The Bank of Russia took a decision on the financial rehabilitation of Joint-stock Commercial Bank MOSKOVSKIY OBLASTNOY BANK (JSCB MOSOBLBANK OJSC), Investment Republican Bank (INRESBANK LLC) and Commercial Bank Finance Business Bank (LLC CB Finance Business Bank) in view of a threat to the interests of creditors and depositors.
Combined anti-bankruptcy measures against the above banks are taken due to sustained economic relations between them and common beneficiaries. The decision on the financial rehabilitation of the banks is aimed at their continued solvency amid an increased growth in liabilities to depositors registered in their reports. The banks will operate as usual, all customers, depositors among them, can utilize their services.
The Bank of Russia identified some facts of material unreliability of data reported by JSCB MOSOBLBANK OJSC. Due to violations of federal legislation and Bank of Russia regulations detected by the regulator within its off-site supervision and on-site inspections in the activities of this credit institution, and its high-risk credit policy, starting from May 2011, JSCB MOSOBLBANK OJSC has been operating within restrictions imposed by the Bank of Russia, including those to operations with household funds, and bans to separate banking operations.
To override the restrictions imposed to taking household funds on deposit, JSCB MOSOBLBANK OJSC conducted wide-scale concealment operations, during which it wrote off funds from the accounts without households’ consent with their further crediting to the accounts of companies that were members of OJSC RFK and registering them in off-balance sheet accounts.
As a result, JSCB MOSOBLBANK OJSC did not show in its reports any deposit values exceeding the limit set by the Bank of Russia. According to data reported as of the end of April 2014, the value of deposits with the bank amounted to 20 billion rubles.
The Bank of Russia repeatedly took remedial actions against JSCB MOSOBLBANK OJSC. In April 2014, the Bank of Russia engaged the state-owned corporation Deposit Insurance Agency (DIA) in assessing the bank financial sustainability.
In May report, JSCB MOSOBLBANK OJSC registered a rise in deposits to over 76 billion rubles, as well a comparable increase in doubtful loans.
Thus, JSCB MOSOBLBANK OJSC took over 100 billion rubles on deposit and ranked 22nd by this indicator, according to the Russian banking system data as of May 1. The Bank of Russia made a decision on the financial rehabilitation of JSCB MOSOBLBANK OJSC, INRESBANK LLC and LLC CB Finance Business Bank at the DIA suggestion, taking into account the economic viability of anti-bankrupt measures.
Anti-bankrupt actions are performed jointly by the DIA and open joint-stock company Bank Severny Morskoy Put (OJSC SMP Bank) in accordance with a Plan of Actions approved by the Bank of Russia Board of Directors.
The Plan involves Bank of Russia’s financing of measures on the financial rehabilitation of JSCB MOSOBLBANK OJSC, INRESBANK LLC and LLC CB Finance Business Bank following the acquisition by OJSC SMP Bank of shares (stakes) in the authorized capital of these banks in the amount (size) that allow to make decisions on issues relating to the reference of the meetings of their shareholders (members). The plan implementation and financing will begin following the establishment of full control over the three banks (the acquisition of about 97% of shares by new owners) and the withdrawal of the previous majority shareholders from banks’ capital.
The Central Bank of the Russian Federation and the Deposit Insurance Agency provide within the Plan of anti-bankrupt measures against JSCB MOSOBLBANK, OJSC INRESBANK LLC and LLC CB Finance Business Bank for funds sufficient to ensure the regular operations of these banks and their compliance with required ratios. The DIA will extend to OJSC SMP Bank a loan worth 96.8 billion rubles for a ten-year period.
The implementation of the Plan approved will allow JSCB MOSOBLBANK OJSC, INRESBANK LLC and LLC CB Finance Business Bank to restore financial sustainability and ensure uninterrupted settlements with customers.
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21.05.2014 00.00.00