The Bank of Russia cancelled a banking license held by Pushkino as of September 30, said a press release posted on the regulator’s website.
As the Bank of Russia’s PR department noted, the decision to apply the last resort (to cancel a banking license) was taken as the bank failed to comply with the federal laws regulating banking activities and CBR’s statutory acts, instances were identified when the bank materially misstated reports and violated many times during the year the requirements provided for by Article 7 of the Federal Law “On Preventing Legalization (Laundering) of Criminal Income and Financing of Terrorist Acts” taking into account the application of the measures stipulated in the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
The lending institution pursued a risky credit policy to invest funds in low-liquidity assets and formed no adequate reserves against possible losses in proportion to the assumed risk. Meanwhile, the lending institution provided the Bank of Russia with materially misstated financial statements showing that the bank’s own funds (capital) are negative.
Said actions led to creditworthiness problems, as a result of which the bank failed to meet creditor claims on time. Furthermore, Pushkino systematically breached the requirements of the supervisory body’s orders and did not comply with the restrictions imposed on separate banking operations. The bank’s management and shareholders took no efficient measures to get the lender’s operations back to normal or rehabilitate it.
Pushkino failed to observe statutory requirements and the Bank of Russia’s statutory acts in the area of the measures to counteract the legalization (laundering) of criminal income and the financing of terrorist acts as to timely provide an authorized body with reliable data on operations that are subject to mandatory supervision.
Having problems with corporate payments, Pushkino closed some offices and stopped to pay deposits to households. This could be the biggest insured event in the history of the Deposit Insurance Agency (DIA) as Pushkino holds nearly Rub 24 bln of household funds.
Furthermore, according to business daily Kommersant, on September 27, 2013 the lending institution’s branches were closed ahead of schedule and employees sent home.
As Banki.ru previously reported, Pushkino has stopped wiring taxes since September 13. The bank’s call center said the reason behind the events is technical work. Pushkino shareholder Alexander Dobrovinsky, a lawyer, told the portal’s reporter that he does not interfere with the bank’s day-
On analyzing the bank’s financial statements from the beginning of 2013 till August 1 (the latest reporting date), Banki.ru experts noted the bank’s financial standing deteriorated and pointed out that the bank is marked by heavy reliance on household funds.
Pushkino is a member of the national deposit insurance system. Insurance indemnity is subject to payment as 100% of the amount of all deposits held at a bank that does not exceed Rub 700,000. An amount not compensated by insurance indemnity will be repaid in the course of the bank’s liquidation in the group of senior lenders. Insurance indemnity for a bank deposit account in a foreign currency is calculated in ruble at the exchange rate quoted by the Bank of Russia as of September 30, 2013. An amount not compensated by insurance indemnity will be repaid in the course of the bank’s liquidation in the group of senior lenders.
Based on the preliminary data, DIA’s insurance liability could total Rub 20.2 bln.
Payments will begin no later than October 14, 2013. Until the specified date DIA will publish in Rossiyskaya Gazeta and will also post an official announcement on its web site for the bank’s deposit holders indicating the place, time, form and the manner of accepting applications seeking insurance indemnity. All deposit holders to be established under the register will later be given notice of this via official letters to be posted.
Moreover, to notify the bank’s deposit holders immediately the agency will use short messaging services.
DIA intends to use agent banks with broad branch networks to promptly accept applications of households and make payments as soon as possible. Such agent banks will be selected by tender no later than October 4, 2013.
Pushkino’s deposit holders will be able to obtain insurance compensation at an agent bank in cash or through a bank transfer to an account specified by a deposit holder.
