OREANDA-NEWS. By its Order No. OD-521, dated 15 February 2016, the Bank of Russia revoked the banking licence from the Rostov-on-Don-based credit institution Rostov-on-Don Joint-stock Commercial Bank Kapitalbank, open joint-stock company, or OJSC JSCB Kapitalbank (Registration No. 2547) from 15 February 2016.

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, and repeated application within a year of measures envisaged by the Federal Law 'On the Central Bank of the Russian Federation (Bank of Russia), taking into account a real threat to the interests of creditors and depositors.

OJSC JSCB Kapitalbank implemented high-risk lending policy and deposited funds in low-quality assets. Adequate assessment of the risks assumed and fair presentation of the bank's assets resulted in the reasons for implementing insolvency (bankruptcy) prevention measures by the credit institution. The management and owners of the bank did not take required measures to normalise its activities.

By its Order No. OD-522, dated 15 February 2016, the Bank of Russia has appointed a provisional administration to OJSC JSCB Kapitalbank for the period until the appointment of a receiver pursuant to the Federal Law 'On 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.

OJSC JSCB Kapitalbank 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 deposits of households determined in accordance with the legislation. This Federal Law provides for the payment of insurance indemnity to the bank's depositors, including individual entrepreneurs, in the amount of 100% of their balances but not exceeding the total of 1.4 million rubles per depositor.

According to the financial statements, as of 1 February 2016, OJSC JSCB Kapitalbank ranked 364th by assets in the Russian banking system.