OREANDA-NEWS. By Order No. OD-617, dated 24 March 2015, the Bank of Russia revoked the banking licence of the Makhachkala-based credit institution Daghestan Commercial Energy Bank Dagenergobank, limited liability company (LLC Dagenergobank) (Registration Number: 3286) from 24 March 2015.

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, established facts of unreliable reporting and taking into account the repeated application to this bank of measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)' over the past year.

LLC Dagenergobank implemented high risk credit policy connected with the placement of fund into low-quality assets. The adequate assessment of the risks assumed and the reliable recognition of the value of bank's assets leads to the full loss of its equity capital. Moreover, LLC Dagenergobank failed to comply with the supervisor requirements to form the adequate loss provisions and provide statements reflecting its real financial standing, which served as a ground for revoking its banking licence envisaged by Part 2 of Article 20 of the Federal Law 'On Banks and Banking Activities'.

The management and owners of the credit institution failed to take effective measures to bring the situation back to normal. Given the situation, the Bank of Russia took a decision to revoke the banking licence of LLC Dagenergobank.

In pursuance of Bank of Russia Order No. OD-618, dated 24 March 2015, a provisional administration has been appointed to LLC Dagenergobank for a term until the appointment of a receiver in accordance with the Federal Law 'On the Insolvency (Bankruptcy) of Credit Institutions' or a liquidator in accordance with Article 23.1 of the Federal Law 'On Banks and Banking Activities'. In compliance with federal laws the powers of the credit institution's executive bodies have been suspended.

LLC Dagenergobank is a participant in the deposit insurance system. The revocation of the banking licence is recognised as an insured event stipulated by Federal Law No. 177-FZ 'On Insurance of Household Deposits in Russian Banks' with regard to the bank's obligations to honour household deposits identified in accordance with the procedure established by law.

According to reporting data, as of 1 March 2015 LLC Dagenergobank ranked 419th in the Russian banking system in terms of assets.