On revocation of banking licence from credit institution Commercial Bank EUROSTANDART and appointment of provisional administration
By its Order No. OD-3386, dated 4 December 2017, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Commercial Bank EUROPEAN STANDART Limited Liability Company, or CB EUROSTANDART LLC (Registration No. 3200). According to the financial statements, as of 1 November 2017, the credit institution ranked 539th by assets in the Russian banking system.
The business of CB EUROSTANDART LLC was focused on conducting ‘shadow’ currency exchange operations which were not were not recorded and not reflected in statements submitted to the Bank of Russia.
This November, the Bank of Russia’s probe established a large amount of counter cash to have been stolen from CB EUROSTANDART LLC. The creation of additional provisions for liabilities under the actually missing assets has led to a substantial loss of the credit institution’s capital, resulting in the emergence of grounds for measures to be enacted to prevent insolvency (bankruptcy) and address the serious real threat to its creditors’ and depositors’ interests.
The Bank of Russia repeatedly applied supervisory measures to CB EUROSTANDART LLC, including restrictions on household deposit taking.
The operations of the credit institution bore signs of the management’s and owners’ unscrupulous conduct, which was displayed through the conduct of transactions towards siphoning off of liquid assets to the detriment of creditor and depositor interests, as well as through action against the Bank of Russia’s probe including obstruction of access to the bank’s cash department.
As it stands, the Bank of Russia took the decision to withdraw CB EUROSTANDART LLC from the banking services market.
The Bank of Russia takes this 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, due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.
By its Order No. OD-3387, dated 4 December 2017, the Bank of Russia appointed a provisional administration to CB EUROSTANDART LLC 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.
CB EUROSTANDART LLC is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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