OREANDA-NEWS. By its Order No. OD-1689, dated 30 May 2016, the Bank of Russia revoked the banking licence of the Moscow-based credit institution Limited Liability Company Promyshlenny Regionalny Bank or LLC Promregionbank (Registration No. 2123) from 30 May 2016.

The Bank of Russia took such an extreme measure — revocation of the banking licence — due to the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, capital adequacy ratios being below 2 percent, decrease in capital below the minimal value of the authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution, and the repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

While implementing its functions, the supervisor has repeatedly established the facts of low quality of the loan portfolio of the LLC Promregionbank which was the reason of filing instructions to the credit institution to minimise the risks assumed. Creation of loan loss reserves to cover the low-quality assets the banks acquired in May 2016 resulted in a complete loss of LLC Promregionbank capital. Both management and owners of the credit institution did not take any effective measures to bring its activities back to normal. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence of the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.

By its Order No. OD-1690, dated 30 May 2016, the Bank of Russia has appointed a provisional administration to LLC Promregionbank 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.

LLC Promregionbank 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 legislation. 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 reporting data, as of 1 May 2016, LLC Promregionbank ranked 340th in the Russian banking system in terms of assets.