The Bank of Russia has stripped Orelsotsbank (based in Orel) of its banking license, said a decision posted on the regulator’s official web site.
The Bank of Russia took a decision to apply the measure of last resort (to revoke a banking license) due to the bank’s failure to comply with the federal laws regulating banking activities and CBR’s statutory acts, identified instances when the bank submitted materially misstated financial reports, and also taking into account the application on numerous occasions of the measures stipulated in the Federal Law “On the Central Bank of Russia (Bank of Russia)”.
“Orelsotsbank failed to meet in the scope needed requirements based on laws and statutory acts of the Bank of Russia’s orders with regard to the reliable assessment of assets and the formation of reserves against possible losses, which was identified following an inspection conducted at the bank. In addition, the supervisory body was provided with materially misstated reports concealing the loss of capital and grounds for the revocation of the banking license. The Central Bank of Russia determined numerous instances when the lending institution failed to fulfill its obligations to deposit holders and other creditors. The bank’s shareholders and executives took no necessary measures to eliminate violations and restore its financial standing," the regulator noted.
Temporary administration commenced work at the bank, and in accordance with the federal laws the powers and authority of the lending institution’s executive bodies were suspended.
Orel Social Bank is a member of the national deposit insurance system. Based on Banki.ru data, as of May 1, 2012 the bank’s net assets stood at Rub 4.4 bln (390th in Russia), capital (calculated in line with CBR requirements) totaled Rub 430 mln, the credit portfolio amounted to Rub 3.75 bln and obligations to households equaled Rub 2.79 bln.
