The Bank of Russia has revoked effective March 28, 2016 banking licenses held by Moscow Smartbank (Registration No. 3408) and Mosvodokanalbank (Registration No. 2863), the regulator's press service reported on Monday.
The regulator decided to cancel the licenses as the lending institutions failed to comply with federal laws regulating banking activities, and CBR's statutory acts, and also because their capital adequacy ratios fell below 2%, the Bank of Russia specified.
Meanwhile, equity capital at Mosvodokanalbank dropped beneath the minimum charter capital as set on the data of the lending institution's state registration. Based on CBR data, the bank invested funds in weak quality assets and formed no adequate loan loss provisions against accepted risks and other assets. "Upon fulfillment of a supervisory body's demands to assess current risks properly the lending institution fully lost its capital," the regulator emphasized. In addition, Mosvodokanalbank did not comply with the requirements of laws counteracting legalization (laundering) of criminal income and the financing of terrorist acts as to timely provide an authorized body with information on operations that are subject to mandatory control.
Smartbank pursued a high-risk credit policy, investing funds in weak quality assets, the Bank of Russia stressed in a press release. Meanwhile, the bank's capital adequacy ratio declined to a critical level. In addition, the bank failed to adhere to the requirements of laws and CBR's statutory acts in the area of counteracting legalization (laundering) of criminal income and the financing of terrorist acts as to timely and accurately provide an authorized body with relevant information. In addition, Smartbank was involved in suspicious, including transit, operations.
The lending institution's management and owners took no efficient measures to normalize its activity, the Bank of Russia emphasized.
Both banks are members of the deposit insurance system. Payment to their deposit holders would begin no later than April 11, the Deposit Insurance Agency (DIA) reported.
As the media previously reported, the Central Bank of Russia switched Smartbank off the Banking Electronic Speedy Payment (BESP) system, while the bank itself has closed recently five Moscow offices without explaining reasons. Russian rating agency RusRating lowered national scale and international credit ratings on Smartbank from B to CC and from CCC+ to C, saying the bank's license is very likely to be revoked.
