As of April 17, 2014 the Bank of Russia has revoked a banking license held by Ufa-based AF Bank (Registration No. 991), materials posted on the regulator’s website run.
AF Bank failed to execute federal laws regulating banking activities and also the Bank of Russia’s statutory acts, the regulator specified. Also, AF Bank’s capital adequacy ratio is under 2%, while its equity dropped below the minimum threshold of the charter capital as set by the Bank of Russia on the date of the lending institution’s state registration. The bank is unable to meet creditors’ claims, the regulator said in a press release.
The bank pursued a high-risk credit policy by investing the money in poor quality assets. “Upon fulfillment of the supervisory body’s requirements to pile up provisions adequate to the risks the lending institution fully lost its equity (capital)," the Bank of Russia said in a press release.
Furthermore, due to the loss of liquidity AF Bank failed to timely fulfill its obligations to creditors or deposit holders. The bank’s management and owners took no measures to rehabilitate the bank. Rescuing AF Bank through the participation of the Deposit Insurance Agency (DIA) on reasonable economic terms was not found possible, the regulator summarized.
AF Bank is a member of the national deposit insurance system, but the revocation of a license is an insured accident as provided for in the Federal Law “On Insuring Retail Deposits at Banks of the Russian Federation”.
AF Bank tried to forestall its bankruptcy, viewing the sale of assets as a possible scenario, sources familiar with the situation at the bank told Banki.ru on Monday.
