Source: Central Bank of the Russian Federation in English
By its Order No. OD-2565, dated 7 November 2019, the Bank of Russia revoked a banking licence from the Cheboksary-based credit institution JOINT-STOCK COMMERCIAL BANK CHUVASHCREDITPROMBANK (PUBLIC JOINT-STOCK COMPANY), or JSCB CHUVASHCREDITPROMBANK PJSC, Registration No. 1280). The credit institution ranked 258th by assets in the Russian banking system1.
The Bank of Russia took this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’2, based on the facts that CHUVASHCREDITPROMBANK:
failed to comply with legislation and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism. The credit institution submitted to the authorised body incomplete and incorrect information, including on operations subject to mandatory control;
conducted dubious transactions with cash foreign currency;
violated capital calculation procedures and deliberately understated the amount of loan loss provisions to be set up. The Bank of Russia estimates that an adequate reflection of the capital and credit risks taken by the credit institution will lead to a significant (over 35%) decrease in its equity. This will result in grounds for insolvency (bankruptcy) prevention measures and real threat to creditors’ interests;
violated federal banking laws and Bank of Russia regulations, due to which the regulator repeatedly applied supervisory measures against it over the last 12 months, which include restrictions on retail deposit-taking.
The activity of CHUVASHCREDITPROMBANK resulted in a considerable amount of low-quality corporate loans in its balance sheet. The Bank of Russia sent the credit institution an order to make a proper assessment of risks assumed and to reflect its real financial standing in the financial statements.
The Bank of Russia appointed a provisional administration to CHUVASHCREDITPROMBANK3 for the period until the appointment of a receiver4 or a liquidator5. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: CHUVASHCREDITPROMBANK is a participant in the deposit insurance system; therefore, depositors6 will be compensated for their deposits in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor (including interest accrued).
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). Detailed information regarding the repayment procedure can be obtained 24/7 at the Agency’s hotline (8 800 200-08-05) and on its website (https://www.asv.org.ru/) in the Deposit Insurance / Insurance Events section.
1 According to the financial statements as of 1 October 2019.
2 The Bank of Russia made this decision 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 stipulated by Article 7 (excluding Clause 3 of Article 7) and Article 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, as well as Bank of Russia regulations issued in pursuance thereof and repeated application within a year of measures stipulated 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.
3 In accordance with Bank of Russia Order No. OD-2566, dated 07 November 2019.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
6 Depositors mean individuals, including those who are engaged in entrepreneurial activity (individual entrepreneurs), and legal entities that are considered small businesses in accordance with the Federal Law ‘On the Development of Small and Medium-sized Enterprises in the Russian Federation’.
07 November 2019
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