OREANDA-NEWS. By its Order No. OD-2106, dated 1 July 2016, the Bank of Russia revoked the banking licence from the Moscow-based credit institution FCRB Bank, limited liability company, or LLC FCRB Bank (Registration No. 3291) from 1 July 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, equity (capital) adequacy ratios below 2 per cent, decrease in bank equity (capital) below the minimum value of the authorised capital established by the Bank of Russia as of the date of the state registration of the credit institution, and due to repeated application within a year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.

With its poor asset quality LLC FCRB Bank failed to adequately assess the risks assumed. Due credit risk assessment as requested by the supervisory authority led to a full loss of the bank’s its equity (capital). The management and owners of the credit institution did not take effective measures to normalise its activities. Under these circumstances, the Bank of Russia performed its duty on the revocation of the banking licence from the credit institution in accordance with Article 20 of the Federal Law ‘On Banks and Banking Activities’.

LLC FCRB Bank is a member of the deposit insurance system. The insured event shall be deemed to have occurred from the date of moratorium to meet the creditors’ claims on the LLC FCRB Bank (1 April 2016), which date is also used to calculate the insurance indemnity to be paid with respect to the bank’s liabilities in a foreign currency.

The revocation of the banking licence prior to the expiry of the moratorium to meet the creditors’ claims shall not override legal implications of its enforcement, including an obligation of the State Corporation Deposit Insurance Agency to pay insurance indemnity for the deposits.

According to the financial statements, as of 1 June 2016, LLC FCRB Bank ranked 126th by assets in the Russian banking system.