On revocation of banking licence from Bulgar Bank and appointment of provisional administration

By its Order No. OD-73, dated 16 January 2017, the Bank of Russia revoked the banking licence from the Yaroslavl-based credit institution joint-stock company Bulgar Bank or JSC Bulgar Bank (Registration No. 1917) from 16 January 2017.

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, revealed unreliability of reporting, 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)’, and given a real threat to the interests of creditors and depositors.

The credit institution failed to meet the supervisor’s requirements to provide financial statements which bear reliable data on its liabilities to individuals to the Bank of Russia. In addition, due to a low quality of assets incapable of generating sufficient cash flow, JSC Bulgar Bank failed to timely honour its liabilities to creditors. Since the beginning of this year, the bank has stopped servicing its customers. The management and owners of the bank did not take measures to bring its activities back to normal. In these circumstances the Bank of Russia decided to withdraw JSC Bulgar Bank from the banking market.

By its Order No. OD-74, dated 16 January 2017, the Bank of Russia has appointed a provisional administration JSC Bulgar Bank 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.

JSC Bulgar Bank is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ ‘On Insurance of Household Deposits with Russian Banks’ regarding the bank’s obligations on deposits of households determined in accordance with the legislation. This Federal Law provides for the payment of insurance indemnity to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of their balances but not exceeding the total of 1.4 million rubles per depositor.

According to the financial statements, as of 1 December 2016, JSC Bulgar Bank ranked 447^th by assets in the Russian banking system.

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