On the revocation of banking licence and appointment of provisional administration
By Order No. OD-1251, dated 2 June 2014, the Bank of Russia revoked the banking licence of the Moscow-based credit institution CLOSED JOINT-STOCK COMPANY COMMERCIAL BANK SOFRINO or CJSC SOFRINO BANK (Registration No. 2972) from 2 June 2014.
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, capital adequacy ratio below 2 percent, decrease in own funds (capital) below the minimal value of authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution and taking into account 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)’.
CJSC SOFRINO BANK implemented high-risk lending policy connected with the placement of funds into low-quality assets. Resulting the implementation of requirements of the supervisory authority on creating provisions adequate to accepted risks the credit institution lost its own funds (capital). Due to the loss of liquidity the bank failed to timely fulfill its obligations to its creditors and depositors. Besides, CJSC SOFRINO BANK failed to comply with requirements of the Bank of Russia order on the imposed restrictions on certain operations in violation of Article 73 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’. The management and owners of the bank have not taken measures required to normalise its activities and recover its financial status. In these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.
By its Order No. OD-1252, dated 2 June 2014, the Bank of Russia has appointed a provisional administration to CJSC SOFRINO BANK for the period until the appointment of a receiver pursuant to the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ 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.
CJSC SOFRINO BANK is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No.
As of 1 May 2014, CJSC SOFRINO BANK was ranked 315th by assets in the Russian banking system.
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02.06.2014 00.00.00