Banking licence of JSC Greencombank revoked
By its Order No. OD-2098, dated 12 September 2019, the Bank of Russia revoked the banking licence of Irkutsk-based Joint-Stock Company Greencombank or JSC Greencombank (Registration No. 1184; hereinafter, Greencombank). The credit institution ranked 410th by assets in the Russian banking system1.
The Bank of Russia took this decision in accordance with Clause 6, Part 1 and Clause 3, Part 2, Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that Greencombank:
- allowed a decrease in its equity capital below its authorised capital, which resulted in the emergence of grounds for insolvency (bankruptcy) prevention measures;
- failed to timely comply with the Bank of Russia’s instruction on aligning its authorised and equity capital;
- violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the last 12 months.
As a result of legal proceedings, Greencombank was found liable to repay before maturity a subordinated bank deposit attracted earlier. This brought the bank’s equity capital below its authorised capital.
A considerable share (more than 55%) of Greencombank’s assets was comprised of non-core assets, including low-liquid real property unused in core activity. Furthermore, recorded on the bank’s balance sheet was a low-quality loan portfolio — more than 90% of outstanding corporate and retail loans were recognised as bad debt.
The management and owners failed to take effective measures to stabilise the credit institution’s financial standing, which suggests that its business operations had no future.
The Bank of Russia appointed a provisional administration to Greencombank3 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: Greencombank 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 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 September 2019.
2 The Bank of Russia’s decision resulted from the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, its failure to meet the Bank of Russia’s demand to align its authorised and equity capital within the timeframe stipulated in paragraph 4.1 of Chapter IX of the Federal Law ‘On Insolvency (Bankruptcy)’, and given the repeated application over the past year of supervisory 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-2099, dated 12 September 2019.
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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