By Order OD-539 dated October 29, 2010 the Bank of Russia revoked the banking license held by Innovative Commercial Bank Petroff-Bank (Moscow), the PR department of the Central Bank of the Russian Federation reported.
The Bank of Russia adopted a decision to apply the last extreme measure — to cancel the banking license, as Petroff-Bank failed to comply with the federal laws that regulate banking activities and CBR’s statutory acts, the lender’s capital adequacy ratio dropped below 2%, own funds declined below the CBR-imposed statutory level as of the lending institution’s state registration, the inability to meet monetary claims of creditors, and also taking into account numerous applications during the year of the measures that are stipulated by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
The Bank of Russia noted that the lender pursued a high-risk lending policy and failed to form adequate reserves against possible loan losses, which resulted in the full loss of the bank’s own funds (capital). Furthermore, due to the loss of liquidity the lender failed to timely fulfill its obligations to creditors. Petroff-Bank management and parties that control the bank failed to take efficient actions to restore the bank’s financial standing.
A temporary administration team was appointed until the appointment of a receiver in accordance with the Federal Law “On Insolvency (Bankruptcy) of Lending Institutions” or a liquidator in line with Article 23.1 of the Federal Law “On Banks and Banking Activity”. In accordance with the federal laws the powers and authority of the lending institution’s executive bodies were suspended.
