The Bank of Russia has revoked as of November 24, 2015 a banking license held by Nota-Bank (based in Moscow, Registration No. 2913), the regulator's press service reported.
The Bank of Russia decided to revoke the license as the lending institution failed to comply with the federal laws regulating banking activities and also CBR's statutory acts, because all its capital adequacy ratios fell below 2% and its equity declined below the minimum threshold set by CBR on the date of the lending institutions' state registration and taking into consideration the multiple application of the measures specified in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".
"The temporary administration team, which runs Nota-Bank and was appointed by the Bank of Russia's October 13 order as monetary obligations to the creditors were not fulfilled, analyzed the bank's financial standing, including to assess its asset quality, and found out that its obligations exceed its assets by over Rub 26 bln excluding risks associated with the possible presentation of claims to fulfill guarantees for over Rub 8 bln," the Bank of Russia pointed out.
Based on CBR data, due to the poor asset quality and in view of the bank's obligations to deposit holders and the amount of the DIA's responsibility it was not possible to take measures to prevent Nota-Bank from going bankrupt on reasonable economic terms. To revive the bank, taking into account financial instruments, which the DIA provided using a CBR loan and equal the insurance liability under deposit accounts (Rub 2.6 bln) it was required to convert voluntarily all the bank's corporate obligations in an amount of 95% of any amounts above Rub 1.4 mln into a perpetual loan. Longer term, the bank's creditors would be unable to cut, in principal, their material losses sustained because of the bank's problems.
For this reason, the Bank of Russia decided to settle Nota-Bank's obligations to the creditors, claims of which pursuant to bankruptcy laws are subject to satisfaction as tier 1 creditors, including ahead of households, balances of whose accounts exceed an amount of earlier received insurance indemnity as the Bank of Russia decided to impose a moratorium on the satisfaction of Nota-Bank's creditor claims. Claims to be satisfied will be increased by an amount of interest accrued for the period when the moratorium is in effect on the rates specified by Article 189.38 of the Federal Law "On Insolvency (Bankruptcy)". Claims of other creditors will be satisfied in the manner specified by law in the course of Not—Bank's bankruptcy procedures.
For this reason, the Bank of Russia approved a plan for the DIA to settle Nota-Bank's obligations, which provides for a tender to be held by the Agency to select a company that will buy the bank's assets and liabilities within a period allowing the bank to start the service of Nota-Bank's Tier 1 creditors at regions covered by the bank (or in the same localities) no later than 14 days after approval of the plan for the DIA to settle the bank's liabilities.
Since October 12, 2015 Nota-Bank has been cut off the Bank of Russia's Banking Electronic Speedy Payment (BESP) system.
As Banki.ru wrote, Nota-Bank limited cash withdrawals to Rub 10,000 per day. The portal's users also said that the bank has faced problems to process payments of businesses and give funds from deposit accounts to households.
Meanwhile, Nota-Bank executives denied reports about restrictions imposed on cash withdrawals. "The bank's management refuted information on limited cash withdrawals, and said these problems were caused by malfunction," the lending institution told Banki.ru. "The malfunction was linked to a failure in the operation of its sponsor bank," Nota-Bank specified.
The news & research team at Banki.ru analyzed the breakdown of the lending institution's assets and liabilities and paid attention to the fact that from January through September 2015 the bank's net assets slid 22%, or Rub 21.9 bln, to Rub 77.8 bln as of September 1, 2015.