The Bank of Russia decided to cancel the banking licenses held by Sakhadiamondbank (registration #3272) and Borsky Commercial Bank (registration #1303) starting September 30, 2010, the PR department of the Central Bank of the Russian Federation reported.
Borsk Commercial Bank was stripped of the license due to its failure to comply with the federal laws regulating banking activities and also CBR’s statutory acts, because of a reduction in the capital adequacy ratio below 2% and a decline in equity capital below the minimal threshold set by CBR on the date of the lending institution’s state registration, the bank’s failure to meet monetary claims of creditors and also the numerous violation during the year of the measures stipulated by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”. The bank pursed a risky lending policy and did not form adequate allowances against possible losses in loans and other assets, which resulted in the full loss of capital and creditworthiness. As a result, the lender became unable to timely fulfill its obligations to creditors. In addition, the lending institution did not obey requirements of executive orders issued by the supervisory body. Neither the management nor shareholders of the bank took efficient steps to restore the bank’s own funds (capital).
Sakhadiamonbank’s banking license was cancelled as it violated the federal laws that regulate banking activities and CBR’s statutory acts, many times breached within one year the requirements of the Federal Law “On Counteracting the Legalization (Laundering) of Crime Income and the Financing of Terrorist Acts”, and taking into account the application during one year of the measures envisaged by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”. In the past 12 months the lender violated many times requirements of the Federal Law “On Counteracting the Legalization (Laundering) of Crime Income and the Financing of Terrorist Acts”, failing to timely provide the Russian Financial Monitoring Service with data about operations subject to mandatory supervision.
In accordance with the CBR order, temporary administration teams commenced work at the banks until bankruptcy receivers or liquidators are appointed. In accordance with the federal laws the powers and authority of the lending institutions’ executive bodies were suspended.
Sakhadiamondbank and Borsky Commercial Bank are members 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 Private Deposits Held with Banks of the Russian Federation”.
