The Russian Central Bank’s Order #DO-715 dated October 15, 2008 cancelled Unitbank’s banking license, the PR Department of the Central Bank of Russia reported Thursday.
This was done due to the determination of facts the lending institution submitted unreliable reports and failed to meet creditor claims under monetary obligations and fulfill the duty of making mandatory payments.
Unitbank failed to observe mandatory reserve figures, inadequately assessed risks under loans granted and contributed partial amounts to form relevant reserves for possible losses and also violated accounting regulations. In addition, the lending institution provided the Bank of Russia with sufficiently unreliable reports that concealed reasons for measures to be taken to prevent insolvency (bankruptcy).
Due to the loss of liquidity Unitbank failed to make timely payments under client accounts. The lending institution’s executives and shareholders failed to restore the bank’s financial standing or eliminate reasons for the revocation of its banking license. Under the circumstances (the bank’s failure to fulfill obligations for more than 14 days), in accordance with the Federal Law “On Banks and Banking Activities” the Central Bank of Russia stripped Unitbank of its license.
In line with the CBR Order #OD-716 dated October 15, 2008 a temporary administration was appointed at the bank until a bankruptcy manager or a liquidator is elected. The authority of the bank’s executive bodies was suspended.
According to the data from news agency Banki.ru and Interfax-CEA, as of July 1, 2008 net assets of Unitbank stood at Rub 1.04 (653rd place in Russia). The lending institution is a member of the national deposit insurance system. The cancellation of the lender’s banking license is an accident insured, as provided for by the Federal Law “On Insuring Private Deposits Held with Banks in the Russian Federation”.
