Bank of Russia: On revocation of banking licence of the credit institution KROSSINVESTBANK and appointment of provisional administration
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, repeated violations within a year of Bank of Russia regulations issued in accordance with the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and the application of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, considering a real threat to the creditors’ and depositors’ interests.
With its poor asset quality JSCB KROSSINVESTBANK OJSC failed to adequately assess the risks assumed. An adequate assessment of the credit risk and a reliable recognition of the bank’s assets resulted in the grounds for the credit institution to implement measures to prevent the bank’s insolvency (bankruptcy). Besides, the bank failed to meet the requirements of Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism, including customer identification procedure, and also the credible notification of the authorised body about operations subject to obligatory control. JSCB KROSSINVESTBANK OJSC was involved in dubious operations.
The management and owners of the bank failed to take effective measures to bring the situation back to normal. Under these circumstances, the Bank of Russia took a decision to revoke the banking licence of JSCB KROSSINVESTBANK OJSC.
By its Order No. OD-1200, dated 11 April 2016, the Bank of Russia has appointed a provisional administration to JSCB KROSSINVESTBANK OJSC 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.
JSCB KROSSINVESTBANK OJSC 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 April 2016, JSCB KROSSINVESTBANK OJSC ranked 446th by assets in the Russian banking system.