The Bank of Russia took a decision to revoke effective June 29, 2012 a banking license held by Vitas Bank (Registration No. 1955, Moscow), this became known from the regulator’s insider information on Friday.
As the regulator’s PR department reported, a decision to take the measure of last resort was adopted due to the non-fulfillment by the lender of the federal laws regulating banking activities and CBR statutory acts, identified instances when unreliable reports were submitted, the bank’s capital adequacy ratio fell below 2% and also taking into account the application of measures stipulated by the Federal Law “On the Central Bank of the Russian Federation” within a year on numerous occasions.
“Vitas Bank pursued a high-risk credit policy and failed to fulfill the requirements of the regulator’s orders to form reserves against possible loan losses that are adequate to the risks taken. Meanwhile, the bank conducted operations to turn one group of low-quality assets into others and furnished the Bank of Russia with misstated financial reports concealing a critical reduction in the bank’s capital and grounds to revoke the bank’s license. The bank’s management and owners took no measures to eliminate violations. Under the circumstances the Bank of Russia was required to revoke the lending institution’s banking license," the Bank of Russia said in a press release.
The regulator rejected Vitas Bank’s request seeking voluntary winding-up as the bank’s activities include grounds for its license to be cancelled.
A temporary administration was introduced at the bank until a receiver or a liquidator is appointed. In accordance with the federal laws the powers and authority of the lending institution’s executive bodies were suspended.
Vitas Bank is a member of the national deposit insurance system. “The revocation of a banking license is an event insured as provided for in the Federal Law “On Insuring Retail Deposits Held at Banks of the Russian Federation” with regard to the bank’s obligations under retail deposits in the manner prescribed by law, the regulator’s PR department specified.
