On revocation of banking licence of JSC Taatta Bank and appointment of provisional administration
By its Order No. OD-1683 , dated 05.07.2018, the Bank of Russia revoked a banking licence from the Yakutsk-based credit institution Joint-stock Company Taatta Bank, (No. 1249), further also referred to as the credit institution. According to financial statements, as of 01.06.2018, the credit institution ranked 220th by assets in the Russian banking system; not a socially important lender, its impact on aggregate indexes of the banking sector of the Republic of Sakha (Yakutia) was unsubstantial.
Problems in the credit institution’s operations owe its origin to the use of a risky business model, which resulted in multiple low-quality assets having built up on its balance sheet. The due diligence check of credit risk conducted at the regulator’s request established a substantial loss of capital, while the nature of its operations was found to call for action to prevent the credit institution’s insolvency (bankruptcy), which created a real threat to its creditors’ and depositors’ interests. Also, the credit institution conducted ‘scheme’ transactions and deals intended to artificially sustain the amount of capital to create the appearance of being formally compliant with prudential regulations.
The Bank of Russia had twice submitted to law enforcement agencies information about these transactions bearing signs of a criminal offence.
The Bank of Russia repeatedly applied supervisory measures to the credit institution, including a restriction and ban on attracting private individuals’ funds.
The management and owners of the bank failed to take any effective measures to normalise its activities. Moreover, their actions in the run-up the licence revocation date suggested fraud as multiple assets were being withdrawn to the detriment of creditors’ and depositors’ interests. The Bank of Russia will submit the information about these facts bearing signs of a criminal offence to law enforcement agencies.
Under these circumstances, the Bank of Russia took the decision to withdraw JSC Taatta Bank from the banking services market.
The Bank of Russia took this measure following the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.
Following banking licence revocation, in accordance with Bank of Russia Order No. ОD-1683, dated 05.07.2018, JSC Taatta Bank’s professional securities market participant licence was revoked.
By its Order No. OD-1684, dated 05.07.2018, the Bank of Russia appointed a provisional administration to JSC Taatta Bank 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 were suspended.
JSC Taatta Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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