Banking licence of Public Bank revoked
By its Order No. OD-1174, dated 24 July 2020, the Bank of Russia revoked the banking licence from the Moscow-based Joint-Stock Company Public Bank (Public Bank (JSC)) (Registration No. 2249; hereinafter, Public Bank). The credit institution ranked 297th by assets in the Russian banking system1.
The Bank of Russia made this decision in accordance with Clauses 6 and 6.1, Part 1, Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that Public Bank:
- Violated federal banking laws and Bank of Russia regulations, which included the understatement of the value of required loss provisions to be formed, due to which the regulator repeatedly applied supervisory measures against it over the last 12 months, including restrictions on a number of banking operations.
- Committed violations of the anti-money laundering and counter-terrorist financing laws and Bank of Russia regulations. The credit institution failed to ensure the completeness and accuracy of the information identifying payers in settlement documents.
Public Bank’s priority area was the issue of bank guarantees, the amount of which was several times larger than the credit institution’s equity. Moreover, the credit institution inadequately assessed the risks it accepted under the bank guarantees provided and the related court proceedings, which entailed a significant understatement of the value of required loss provisions to be formed.
In addition, this year the bank carried out non-transparent transactions in large amounts with non-resident payment agents to transfer individuals’ funds, and the related information has been sent by the Bank of Russia to law enforcement authorities.
The Bank of Russia appointed a provisional administration3 to Public Bank for the period until the appointment of a receiver4 or a liquidator5. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Public Bank is a participant in the deposit insurance system; therefore depositors6 will be compensated for their deposits in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor (including interest accrued).
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). Depositors may obtain detailed information regarding the repayment procedure 24/7 at the Agency’s hotline
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1 According to the financial statements as of 1 July 2020.
2 The Bank of Russia made this decision due to the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within one year of the requirements stipulated by Article 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and the requirements of Bank of Russia regulations issued in accordance with the above Federal Law, and taking into account repeated application within one year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
3 In accordance with Bank of Russia Order No. OD-1175, dated 24 July 2020.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
6 Depositors mean individuals, including those who are engaged in entrepreneurial activity (individual entrepreneurs), and legal entities that are considered small businesses in accordance with the Federal Law ‘On the Development of Small and Medium-sized Enterprises in the Russian Federation’.
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24.07.2020 00.00.00