Bank of Russia: On revocation of banking licence from credit institution Soveren Bank and appointment of provisional administration (4/8/2016)
OREANDA-NEWS. By its Order No. OD-1181, dated 8 April 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution joint-stock company Soveren Bank or JSC Soveren Bank (Registration No. 3206) from 8 April 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, application of supervisory measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, and considering a real threat to the creditors’ and depositors’ interests.
JSC Soveren Bank implemented a high-risk lending policy connected with the placement of funds in low-quality assets. The credit institution’s rules of internal controls on anti-money laundering and the financing of terrorism did not comply with Bank of Russia regulations. At the same time, JSC Soveren Bank was involved in dubious transactions connected with overseas money diversion. The management and owners of the credit institution failed to take effective measures to bring the situation back to normal.
By its Order No. OD-1182, dated 8 April 2016, the Bank of Russia has appointed a provisional administration to JSC Soveren 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.
JSC Soveren Bank 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 law. 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 no more than 1.4 million rubles per one depositor.
According to the financial statements, as of 1 March 2016, JSC Soveren Bank ranked 485th by assets in the Russian banking system.