On revocation of banking licence from credit institution RIABANK and appointment of provisional administration
By its Order No. OD-2323, dated 17 August 2017, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Commercial Bank Russian Investment Alliance (joint-stock company) or CB RIABANK (JSC) (Registration No. 3434) from 17 August 2017. According to the financial statements, as of 1 August 2017, the credit institution ranked 334th by assets in the Russian banking system.
RIABANK had ineffective risk management and internal controls which resulted in large volume of low-quality assets. Proper credit risk assessment and fair presentation of asset value in the bank’s financial statements revealed a complete loss of its equity capital. The bank’s business model was not aimed at conventional banking services. The credit institution was involved in dubious cash-out transactions and overseas money diversion.
The Bank of Russia repeatedly applied supervisory measures to RIABANK, including three impositions of restrictions on household deposit taking.
The management and owners of the bank failed to take effective measures to normalise its activities. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from RIABANK in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
The Bank of Russia took such an extreme measure because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, equity capital adequacy ratios below two per cent, decrease in bank equity capital below the minimum value of the authorised capital established as of the date of the state registration of the credit institution, and given the 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-2324, dated 17 August 2017, the Bank of Russia has appointed a provisional administration to RIABANK for the period until the appointment of a receiver pursuant to the Federal Law ‘On the 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 have been suspended.
RIABANK is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
The reference to the Press Service is mandatory if you intend to use this material.