On the revocation of banking license and appointment of provisional administration
By Order No. OD-919, dated 20 November 2013, the Bank of Russia revoked the banking license of the Moscow-based commercial bank Master Bank (Open Joint-Stock Company) from 20 November 2013.
The Bank of Russia took such an extreme measure due to Master Bank’s failure to comply with federal banking laws and Bank of Russia regulations, as well as falsified accounting and repeated violations over the past year of the requirements stipulated by Article 7 (excluding Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalization (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ taking into account the repeated application over the past year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
While exercising its supervisory functions, the Bank of Russia revealed the facts of material misreporting of data by Master Bank. An adequate assessment of risks assumed and an objective recording of assets in financial statements of a credit institution lead to a loss of its equity capital. At the same time, the low quality is typical primarily of the loans extended to persons related to the business of the bank’s owners.
Master Bank failed to comply with the requirements of legislation on anti-money laundering and combatting the financing of terrorism in respect to proper identification of customers.
The credit institution was involved in large-scale doubtful operations.
The management and owners of the bank did not take effective measures to bring the situation back to normal.
The revocation of the license of Master Bank is the result of the consistent policy pursued by the Bank of Russia, aimed at withdrawing from the banking services market of credit institutions involved in illegal activities, violating banking legislation, falsifying data on their financial standing and posing a real threat to the interests of creditors and depositors.
In pursuance of Bank of Russia Order No. OD-920, dated 20 November 2013, a provisional administration has been appointed to the credit institution for a term until the appointment of a receiver in accordance with the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ or a liquidator in accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In compliance with federal laws the powers of the credit institution’s executive bodies have been suspended.
Master Bank is a participant in the deposit insurance system. The revocation of the banking license is recognized as an insured event stipulated by Federal Law No.
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21.11.2013 00.00.00