Banking licence of GEFEST Bank Ltd revoked
By its Order No. OD-321, dated 28 February 2024, the Bank of Russia revoked the banking licence of GEFEST Commercial Bank Company limited by shares (GEFEST Bank Ltd) (Reg. No. 1046, Kimry, Tver Region). The credit institution ranked 336th by assets in the Russian banking system.1
The Bank of Russia made this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’2 based on the facts that GEFEST Bank Ltd:
- violated federal banking laws and Bank of Russia regulations, due to which the regulator repeatedly applied measures against violations over the past 12 months, including restrictions to raise funds from depositors;3 and
- failed to comply with the anti-money laundering and counter-terrorist financing laws.
Owing to its inefficiency and captive nature, GEFEST Bank Ltd’s business has long been loss-making. Legal entities directly or indirectly connected with its beneficiaries accounted for a substantial share of the bank’s corporate credit portfolio. Moreover, low-quality loans accounted for over 60% of the portfolio. Given the above, the credit institution performed transactions ensuring formal compliance with capital requirements. In addition, GEFEST Bank Ltd disregarded the regulator’s instructions to eliminate the information security violations identified in its activity.
By its Order No. OD-322, dated 28 February 2024, the Bank of Russia appointed the State Corporation Deposit Insurance Agency as a provisional administration to manage GEFEST Bank Ltd until a receiver4 or a liquidator5 is appointed. The powers of the credit institution’s executive bodies were suspended under federal laws.
Information for depositors: GEFEST Bank Ltd is a participant in the deposit insurance system; therefore, the bank’s depositors 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 per depositor (including interest accrued), taking into account the specifics stipulated by Chapter 2.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’.
Deposits are repaid by the Deposit Insurance Agency. Depositors may obtain detailed information regarding the repayment procedure 24/7 at the Agency’s hotline
1 According to the financial statements as at 1February 2024.
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 of the requirements stipulated by Articles 6, 7 (except for Clause 3 of Article 7) and 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 this Federal Law within one year, and the repeated application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ within one year.
3 Depositor means a citizen of the Russian Federation, a foreign citizen or a stateless person, including those engaged in entrepreneurial activity, or a legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’ which concluded a bank deposit/account agreement with a bank, or any of the above mentioned persons in whose favour the deposit was made and/or who is the holder of a savings certificate, or an owner of a special account (special deposit) intended for forming and using the fund of capital repairs of common property in an apartment house opened in accordance with the requirements of the Housing Code of the Russian Federation.
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’.
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28.02.2024 08.32.00