On revocation of banking licence of credit institution Russian International Bank and appointment of provisional administration
By its Order No. OD-2550, dated 4 September 2017, the Bank of Russia revoked the banking licence from the Moscow-based credit institution joint-stock company Russian International Bank or Russian International Bank (Registration No. 3123) from 4 September 2017. According to the financial statements, as of 1 August 2017, the credit institution ranked 137th by assets in the Russian banking system.
The business model of Russian International Bank was to a great extent focused on high-risk lending to borrowers, including non-residents, related to the credit institution’s ultimate beneficiary owners. Due to the poor quality of assets, which had failed to generate sufficient cash flow, the bank was incapable of honouring its obligations to creditors on time. Moreover, the credit institution failed to comply with laws and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism with regard to submitting reliable information to the authorised agency on time.
The Bank of Russia has repeatedly applied supervisory measures to Russian International Bank, including restrictions (on two occasions) and a ban on household deposit taking.
The management and owners of Russian International Bank failed to take effective measures to bring its activities back to normal. Under the circumstances the Bank of Russia took the decision to withdraw the credit institution from the banking services market.
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, repeated violations within a year of Bank of Russia requirements stipulated by Article 7 (excluding Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’ as well as Bank of Russia regulations issued in accordance with the said law and application of the measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, taking into account a real threat to the interests of creditors.
By its Order No. OD-2551, dated 4 September 2017, the Bank of Russia has appointed a provisional administration to Russian International Bank 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 have been suspended.
Russian International Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
The reference to the Press Service is mandatory if you intend to use this material.