On the revocation of banking licence and appointment of provisional administration

By Order No. OD-1046, dated 16 May 2014, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Ogni Moskvy Commercial Bank, a limited liability company (Ogni Moskvy Bank LLC) (Registration No. 2328), from 16 May 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, its inability to satisfy creditors’ claims on its pecuniary liabilities 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)’.

Ogni Moskvy Bank LLC implemented a high-risk lending policy connected with the placement of funds in low-quality assets. Due to the poor quality of assets, which failed to generate sufficient cash flow, the bank failed to honour its liabilities to creditors on time. The management and owners of Ogni Moskvy Bank LLC failed to take effective measures to normalise its activity and rehabilitate it financially. Given the situation, the Bank of Russia guided by Article 20 of the Federal Law ‘On Banks and Banking Activities’ performed its duty and revoked the banking licence from Ogni Moskvy Bank LLC.

In pursuance of Bank of Russia Order No. OD-1047, dated 16 May 2014, a provisional administration has been appointed to Ogni Moskvy Bank LLC 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.

Ogni Moskvy Bank LLC is a participant in the deposit insurance system. The revocation of the banking licence is recognised as an insured event stipulated by Federal Law No. 177-FZ ‘On Insurance of Household Deposits in Russian Banks’ with regard to the bank’s liabilities on household deposits identified in accordance with the procedure established by law.

As of 1 April 2014, Ogni Moskvy Bank LLC ranked 177^th in the Russian banking system in terms of assets.

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