Effective March 10, 2011 by its order the Bank of Russia revoked the banking license held by Multibank (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 Multibank 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
After changing hands the bank reflected in its books actually absent securities and did not form adequate reserves against possible losses under other assets, which resulted in the total loss of capital. Upon receipt of the evidence that the bank lacks assets the Bank of Russia revoked Multibank’s banking license in accordance with Article 20 of the Federal Law “On Banks and Banking Activity”.
A temporary administration team was appointed for Multibank 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.
Multibank is a member of the national deposit insurance system. The revocation of a banking license is an accident insured as provided for by Federal Law #177-FZ “On Insuring Household Deposits Held at Banks of the Russian Federation”.
