27.02.2016, 02:00
Bank of Russia Revoked Licence from Bank ZERICH CJSC
OREANDA-NEWS. By its Order No. OD-674, dated 26 February 2016, the Bank of Russia revoked the banking licence from the Orel-based credit institution Bank ZERICH, closed joint-stock company, or Bank ZERICH CJSC (Registration No. 3278) from 26 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, repeated violations within a year of the requirements of Articles 6, 7 (except for Clause 3 of Article 7) of the Federal Law 'On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism', and the Bank of Russia regulatory requirements issued in accordance with the said Federal Law, 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)', considering a real threat to the creditors' and depositors' interests.
With its poor asset quality Bank ZERICH CJSC failed to adequately assess the risks assumed. Due credit risk assessment resulted in a full loss of the bank's equity capital. Since late February 2016 the credit institution has actually stopped its operations and failed to meet its obligations to creditors on a timely basis.
Besides, Bank ZERICH CJSC failed to meet the Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism, including, but not limited to, the timely and credible notification of the authorised body about operations subject to obligatory control. The credit institution was focused on dubious transit operations.
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'.
By its Order No. OD-675, dated 26 February 2016, the Bank of Russia has appointed a provisional administration to Bank ZERICH CJSC 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.
Bank ZERICH CJSC is a member of the deposit insurance system. The revocation of the 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 liabilities on deposits of households determined in accordance with the legislation. The said Federal Law stipulates the insurance premium as one hundred per cent reimbursement of the entire deposit to bank depositors, including individual entrepreneurs, but not more than 1.4 million rubles in aggregate per depositor.
According to the financial statements, as of 1 February 2016, Bank ZERICH CJSC ranked 453rd by assets in the Russian banking system.
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 the requirements of Articles 6, 7 (except for Clause 3 of Article 7) of the Federal Law 'On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism', and the Bank of Russia regulatory requirements issued in accordance with the said Federal Law, 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)', considering a real threat to the creditors' and depositors' interests.
With its poor asset quality Bank ZERICH CJSC failed to adequately assess the risks assumed. Due credit risk assessment resulted in a full loss of the bank's equity capital. Since late February 2016 the credit institution has actually stopped its operations and failed to meet its obligations to creditors on a timely basis.
Besides, Bank ZERICH CJSC failed to meet the Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism, including, but not limited to, the timely and credible notification of the authorised body about operations subject to obligatory control. The credit institution was focused on dubious transit operations.
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'.
By its Order No. OD-675, dated 26 February 2016, the Bank of Russia has appointed a provisional administration to Bank ZERICH CJSC 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.
Bank ZERICH CJSC is a member of the deposit insurance system. The revocation of the 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 liabilities on deposits of households determined in accordance with the legislation. The said Federal Law stipulates the insurance premium as one hundred per cent reimbursement of the entire deposit to bank depositors, including individual entrepreneurs, but not more than 1.4 million rubles in aggregate per depositor.
According to the financial statements, as of 1 February 2016, Bank ZERICH CJSC ranked 453rd by assets in the Russian banking system.
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