OREANDA-NEWS. By its Order No. OD-2776, dated 9 October 2014, the Bank of Russia revoked the banking licence from the Moscow-based credit institution open joint-stock company JOINT-STOCK Commercial Bank Universal Credit or OJSC JSCB Universal Credit (Registration No. 2903) from 9 October 2014.

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, revealed facts of significant unreliability of reporting data, capital adequacy ratio below 2 percent, decrease in own funds (capital) below the minimal value of authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution, inability to meet creditors' claims on monetary obligations, and the application of supervisory measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)'.

The bank implemented high-risk lending policy connected with the placement of funds into low-quality assets. Resulting the creation of provisions adequate to the accepted risks the credit institution lost its own funds (capital). Due to the loss of liquidity OJSC JSCB Universal Credit failed to timely meet its obligations to creditors. Besides, the bank presented significantly unreliable financial statements to the Bank of Russia and failed to meet the requirements of the regulator's instructions on representing its real financial standing.

The management and owners of the credit institution did not take measures required to normalise its activities and recover its financial status. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from OJSC JSCB Universal Credit in accordance with Article 20 of the Federal Law 'On Banks and Banking Activities'.

By its Order No. OD-2777, dated 9 October 2014, the Bank of Russia has appointed a provisional administration to OJSC JSCB Universal Credit for the period until the appointment of a receiver pursuant to the Federal Law 'On the Insolvency (Bankruptcy) of Credit Institutions' 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.

OJSC JSCB Universal Credit is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ 'On Insurance of Household Deposits with Russian Banks' regarding the bank's liabilities on deposits of households determined in accordance with the legislation.

According to the financial statements, as of 1 September 2014, OJSC JSCB Universal Credit ranked 495th by assets in the Russian banking system.