Banking licence of IRS-BANK revoked
By its Order No. OD-980, dated 28 May 2021, the Bank of Russia revoked the banking licence of the Moscow-based Joint-Stock Commercial Bank IRS, or IRS-BANK (Registration No. 272; hereinafter, IRS-BANK). The credit institution ranked 317th by assets in the Russian banking system.1
The Bank of Russia made this decision in accordance with Clause 6 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that IRS-BANK:
- understated the amount of loan loss provisions to be set up and overstated the value of assets to artificially improve its financial indicators and conceal its actual financial standing;
- violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the last 12 months.
The loan portfolio of IRS-BANK was largely composed of troubled loans. Notwithstanding the low quality of its loan portfolio, the credit institution performed transactions to artificially maintain its equity capital in order to formally comply with prudential requirements.
An order to adjust the value of assets was sent to IRS-Bank. The credit institution’s efforts to fulfil this order resulted in the emergence of grounds for implementing measures to prevent its insolvency (bankruptcy).
IRS-BANK was involved in dubious operations to withdraw funds abroad through the prepayment for goods imports, and also in dubious transit operations.
The Bank of Russia appointed a provisional administration3 to IRS-BANK 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: IRS-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), except for the cases stipulated by 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 May 2021.
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, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.
3 In accordance with Bank of Russia Order No. OD-981, dated 28 May 2021.
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 engaged in entrepreneurial activity, or a legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’ which concluded a bank deposit/account agreement with a bank, 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 the owner of a special account (special deposit) intended 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.
The reference to the Press Service is mandatory if you intend to use this material.
28.05.2021 00.00.00