The PR department of the Bank of Russia said on Thursday that by its Order OD-738 dated November 18, 2009 CBR cancelled the banking license held by Commercial Bank Kuban (Moscow). This action was caused by “the establishment of facts when the lending institution presented materially unreliable reports and failed to meet monetary claims of creditors”.
Due to the loss of liquidity the lender failed to make timely settlements on client accounts. In addition, the lending institution provided the supervisory body with financials that concealed its real financial standing.
In line with the Bank of Russia’s Order OD-739 dated November 18, 2009 the temporary administration team was appointed until the appointment of a receiver in accordance with the Federal Law “On Insolvency (Bankruptcy)” or a liquidator in line with Article 23.1 of the Federal Law “On Banks and Banking Activities”. The powers and authority of the bank’s executive bodies were suspended.
Moreover, CBR issued an order (#OD-736) on November 18, 2009 to revoke the banking license held by Inter-Regional Investment Bank (IIB, Moscow). The lender’s license was cancelled due to its non-fulfillment of federal laws regulating banking activities and CBR statutory acts, established facts confirming the presentation of unreliable financials, the inability to meet monetary claims of creditors and make mandatory payments, and also taking into account the application within a year and on numerous occasions of the measures stipulated by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
CBR emphasized in a statement that IIB failed to make timely settlements on accounts of its clients, pursued a high-risk lending policy and formed no adequate reserves for possible losses under loans granted. In addition, the bank did not comply with the procedure for forming mandatory reserves at the Bank of Russia and provided the Central Bank with substantially unreliable reports, concealing the lending institution’s unsatisfactory financial standing.
IIB is also under temporary administration now (by virtue of CBR Order OD-737 dated November 11, 2009) and the powers and authority of the lender’s executive bodies were suspended.
Since this bank is a member of the national deposit insurance system, the revocation of a banking license is an accident insured as provided for by the Federal Law “On Insuring Household Deposits Held with Banks of the Russian Federation”.
