On revocation of banking licence of credit institution International Bank of Development and appointment of provisional administration

By its Order No. OD-4400, dated 9 December 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Commercial Bank International Bank of Development (Joint-Stock Company), or CB International Bank of Development (JSC) (Registration No. 2704) from 9 December 2016.

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, failure to satisfy creditors’ claims on financial liabilities and the repeated application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ over the year.

CB International Bank of Development (JSC) conducted highly risky policy and placed funds in low quality assets. The execution of authorised body’s order to establish adequate provisions for possible losses by the bank created grounds for taking measures to avoid insolvency (bankruptcy). Due to the low quality of assets, which did not create sufficient capital flow, the credit institution failed to timely satisfy its liabilities to creditors. Management and owners of CB International Bank of Development (JSC) did not take effective measures to bring its activities back to normal and under such circumstances, in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’, the Bank of Russia performed its duty and revoked the banking licence.

By its Order No. OD-4401, dated 9 December 2016, the Bank of Russia appointed a provisional administration to CB International Bank of Development (JSC) 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.

CB International Bank of Development (JSC) is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ in respect of the bank’s retail deposit obligations, as defined by law. The said Federal Law provides for the payment of indemnities to the bank’s depositors, including individual entrepreneurs, in the amount of 100% of the balance of funds but no more than 1.4 million rubles per depositor.

According to the financial statements, as of 1 November 2016, CB International Bank of Development (JSC) ranked 423rd by assets in the Russian banking system.

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09.12.2016 00.00.00