On revocation of banking licence of credit institution Novatsiya and appointment of provisional administration

By its Order No. OD-111, dated 23 January 2017, the Bank of Russia revoked the banking licence of the Maikop-based credit institution Novatsiya Joint-stock Commercial Bank (Public Joint-stock Society) PJSC JSCB Novatsiya (Registration No. 840, the city of Maikop) from 23 January 2017.

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, and the application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, and considering the existence of a serious threat to creditors’ and depositors’ interests.

PJSC JSCB Novatsiya implemented high-risk lending policy linked to the placement of funds into low-quality assets. Adequate assessment of risks assumed created grounds for the credit institutions’ initiating measures to prevent insolvency (bankruptcy). Besides, due to the loss of liquidity the credit institution failed to timely honour its obligations to creditors. The management and owners of the bank have not taken measures required to normalise its activities. Under these circumstances, the Bank of Russia decided to take out PJSC JSCB Novatsiya from the banking services market.

By its Order No. OD-112, dated 23 January 2017, the Bank of Russia has appointed a provisional administration to PJSC JSCB Novatsiya 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 are suspended.

PJSC JSCB Novatsiya 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 not more than 1.4 million rubles per depositor.

According to the financial statements, as of 1 January 2017, PJSC JSCB Novatsiya ranked 416^th by assets in the Russian banking system.

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