OREANDA-NEWS. By its Order No. OD-1772, dated 24 July 2015, the Bank of Russia revoked the banking licence from the Moscow-based credit institution MOSSTROYECONOMBANK, closed joint-stock company, or CJSC M BANK (Registration No. 948) from 24 July 2015.

The Bank of Russia took such an extreme measure - revocation of the banking licence - because of the failure of the credit institution to comply with federal banking laws and Bank of Russia regulations, repeated application within a year of measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia)', and considering real threat posed to the creditors' and depositors' interests.

CJSC M BANK deposited funds in low-quality assets. As a corollary, the Bank of Russia repeatedly requested the credit institution to create loan loss provisions adequate to the risks assumed. The management and owners of the bank did not take efficient measures to normalise its activities. Due to the bank's low quality assets it was found impossible to effect a financial rehabilitation of CJSC M BANK assisted by the state corporation Deposit Insurance Agency on reasonable economic terms.

By its Order No. OD-1773, dated 24 July 2015, the Bank of Russia has appointed a provisional administration to CJSC M 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 are suspended.

CJSC M BANK 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 obligations on household deposits determined in accordance with the legislation.

According to the financial statements, as of 1 July 2015, CJSC M BANK ranked 112th by assets in the Russian banking system.