Banking licence of Rosbusinessbank revoked
By its Order No. OD-1713, dated 23 October 2020, the Bank of Russia revoked a banking licence from the Moscow-based credit institution Joint-Stock Russian Commercial Bank ‘Rosbusinessbank’ (Public Joint-Stock Company), or Rosbusinessbank (Registration No. 1405). The credit institution ranked 338th by assets in the Russian banking system.1
The Bank of Russia made this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that Rosbusinessbank:
- violated federal banking laws and Bank of Russia regulations, which included the understatement of the value of required loss provisions to be formed, due to which the regulator repeatedly applied supervisory measures against it over the last 12 months, including restrictions on attracting funds of individuals;
- failed to comply with the anti-money laundering and counter-terrorist financing laws. The credit institution failed to timely submit to the authorised body information about operations subject to obligatory control.
Bad loans comprise over 50% of the loan portfolio of Rosbusinessbank. Moreover, over the course of the last year, the bank repeatedly overstated the amount of its equity capital and submitted incorrect values to the Bank of Russia. In this circumstances, Rosbusinessbank actively conducted non-transparent deals with an affiliated entity. These deals were of a non-market nature and were aimed at transforming the bank’s loan portfolio in order to conceal the real size of credit risks assumed.
The compliance with the Bank of Russia’s requirements to create additional provisions for possible losses and adjust Rosbusinessbank’s capital established grounds for measures to be enacted to prevent insolvency (bankruptcy) which resulted in a real threat to its creditors’ and depositors’ interests.
The Bank of Russia appointed a provisional administration to Rosbusinessbank3 for the period until the appointment of a receiver4 or a liquidator.5 In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Rosbusinessbank is a participant in the deposit insurance system, therefore depositors will be compensated for their deposits6 in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor (including interest accrued), excluding the cases stipulated in Chapter 2.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’.
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). Depositors may obtain detailed information regarding the repayment procedure 24/7 at the Agency’s hotline
1 According to the financial statements as of 1 October 2020.
2 The Bank of Russia made this decision because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within a year of the requirements stipulated by Article 7 (excluding Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ in view of repeated application within a year of measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, taking into account a real threat to the interests of creditors and depositors.
3 In accordance with Bank of Russia Order No. OD-1714, dated 23 October 2020.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
6 Depositor means a citizen of the Russian Federation, foreign citizen or person without citizenship, including those who are engaged in entrepreneurial activity, or legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’, which concluded with a bank a bank deposit/account agreement, or any of the above mentioned persons in whose favour the deposit was made and (or) who is the holder of a savings certificate, or an owner of a special account (special deposit) designed to form and use the fund of capital repairs of common property in an apartment house opened in accordance with the requirements of the Housing Code of the Russian Federation.
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