On revocation of banking licence of credit institution INTERNATIONAL CONSTRUCTION BANK and appointment of provisional administration
By its Order No. OD-1138, dated 28 April 2017, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Commercial Bank INTERNATIONAL CONSTRUCTION BANK (Limited liability company) or CB ICB (LLC) (Registration No. 3484) from 28 April 2017. According to the financial statements, as of 1 April 2017, CB ICB (LLC) ranked 423rd by assets in the Russian banking system. The credit institution is not a member of the deposit insurance system.
The problems faced by CB ICB (LLC) have resulted from its extremely risky business model and the low quality of the bigger portion of its assets caused by lending to shell companies. The bank’s activities bore the signs of unfair practice on the part of its management and owners manifested in the diversion of assets to the detriment of creditors and conduct of fraudulent operations aimed at masking the real credit risk.
Due to the acute liquidity strain, CB ICB (LLC) has actually lost the ability to honour its obligations to creditors in full.
The Bank of Russia has repeatedly applied supervisory measures to the credit institution, including restrictions and prohibition on the conduct of certain operations.
The management and owners of the bank have not taken so far effective measures to bring its activities back to normal. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
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 the bank’s inability to meet monetary obligations to creditors, and also taking into account repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
By its Order No. OD-1139, dated 28 April 2017, the Bank of Russia has appointed a provisional administration to CB ICB (LLC) for the period until the appointment of a receiver pursuant to the Federal Law ‘On 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.
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28.04.2017 00.00.00