Banking licence of CB Sputnik (PJSC) revoked
By its Order No. OD-2198, dated 1 November 2021, the Bank of Russia revoked a banking licence from the Samara-based Commercial Bank Sputnik (public joint-stock company), or CB Sputnik (PJSC) (Registration No. 1071; hereinafter, CB Sputnik). The credit institution ranked 295th by assets in the Russian banking system.1
By its Order No. OD-1894, dated 9 September 2021, the Bank of Russia appointed the State Corporation Deposit Insurance Agency as the provisional administration to manage CB Sputnik.2
The provisional administration ensured accurate recording of the credit institution’s assets and liabilities in its statements.
Moreover, as a result of cash revision at the credit institution’s offices, the provisional administration detected a large cash shortage. Having considered the application on this shortage submitted by the provisional administration, the law enforcement agencies initiated criminal cases.
As a result of the said measures, the authorities established that CB Sputnik had lost all its equity.
Given these facts, the Bank of Russia performed its duty to revoke CB Sputnik’s banking licence pursuant to Article 20 of the Federal Law ‘On Banks and Banking Activities’. The Bank of Russia made this decision in accordance with Clause 6 of Part 1 and Clauses 1 and 2 of Part 2 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,3 based on the facts that CB Sputnik:
- had lost all its equity;
- had been understating the value of required provisions for possible losses on loan and similar debts and overstating the value of its assets in accounting and statements;
- had been violating federal banking laws and Bank of Russia regulations and orders, due to which the regulator had repeatedly applied measures against it over the past 12 months, which included restrictions on household deposit-taking; and
- had been involved in dubious foreign exchange transactions.
Following the revocation of the banking licence, the provisional administration’s activity to manage CB Sputnik carried out by the State Corporation Deposit Insurance Agency pursuant to Bank of Russia Order No. OD-1894, dated 9 September 2021, was terminated by Bank of Russia Order No. OD-2199, dated 1 November 2021.
By its Order No. OD-2022, dated 1 November 2021, the Bank of Russia appointed the provisional administration to CB Sputnik for a period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ or the appointment of a liquidator based on 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 were suspended.
CB Sputnik is a member of the deposit insurance system. An insured event is deemed to have occurred since the first day of the moratorium imposed on the claims of the bank’s creditors (10 September 2021), which is also the date as of which insurance payments are calculated in relation to the bank’s foreign currency liabilities.
The revocation of the banking licence before the end of the moratorium on the creditors’ claims does not cancel the legal consequences of its imposition, including the State Corporation Deposit Insurance Agency’s obligation to make deposit insurance payments.
The State Corporation Deposit Insurance Agency continues to make insurance payments to CB Sputnik’s depositors4 on the grounds stipulated by Clause 2 of Part 1 of Article 8 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’, that is, the moratorium on the claims of the bank’s creditors imposed by the Bank of Russia before the termination of the bankruptcy proceedings. 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 October 2021.
2 http://www.cbr.ru/press/pr/?file=10092021_075352pr.htm.
3 The Bank of Russia made this decision because the credit institution failed to comply with federal banking laws and Bank of Russia regulations, all its capital adequacy ratios were below two per cent, its equity declined beneath the minimum established for its authorised capital as of the date of the credit institution’s state registration, and taking into account repeated application within one year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
4 Depositor is 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 an 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.
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01.11.2021 00.00.00