Banking licence of Neva Construction and Investment Bank revoked
By its Order No. OD-1176, dated 24 July 2020, the Bank of Russia revoked a banking licence from Neva Construction and Investment Bank Limited Liability Company, or NCI Bank LLC (Registration No. 1926, Saint Petersburg; hereinafter, NCI Bank). The credit institution ranked 349th by assets in the Russian banking system1.
The Bank of Russia took this decision in accordance with Clauses 6 and 6.1, Part 1, Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that NCI Bank:
- failed to comply with legislation and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism. The credit institution failed to timely provide credible information to the authorised body about operations subject to obligatory control;
- conducted dubious transit operations related to shadow sales of cash receipts to third parties by retail trade firms;
- violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the last 12 months.
The credit institution’s activity was of a strongly captive nature. A significant share of the bank’s loan portfolio consisted of loans to legal entities associated with its main owner. That said, low-quality loans accounted for more than 70% of the loan portfolio.
The Bank of Russia appointed a provisional administration3 to NCI Bank for the period until the appointment of a receiver4 or a liquidator5. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: NCI Bank is a participant in the deposit insurance system, therefore depositors6 will be compensated for their deposits 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).
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). For details of the repayment procedure, depositors may call the Agency’s 24/7 hotline
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1 According to the financial statements as of 1 July 2020.
2 The Bank of Russia took this decision due the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within one year of the requirements stipulated by Article 7 (except for Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and the requirements of Bank of Russia regulations issued in compliance with the indicated Federal Law, and taking into account repeated applications within one year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
3 In accordance with Bank of Russia Order No. OD-1177, dated 24 July 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 Depositors mean individuals, including those who are engaged in entrepreneurial activity (individual entrepreneurs), and legal entities that are considered small businesses in accordance with the Federal Law ‘On the Development of Small and Medium-sized Enterprises in the Russian Federation’.
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24.07.2020 00.00.00