The Bank of Russia has revoked as of July 19, 2016 a banking license held by Arksbank (Registration No. 1868), the regulator's press service reported.
The Bank of Russia explains the application of the last-resort measure by the lending institution's failure to fulfill federal banking laws, and also its statutory acts and the application of the measures provided for in the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)" taking into account a real threat to the interests of the bank's creditors and deposit holders.
"Arksbank's operation focused on drawing household funds and investing them in poor quality assets. Meanwhile, the lending institution piled up no loan loss provisions adequate to the accepted risks. In spite of the restrictions imposed by the supervisory body to attract household funds, Arksbank continued to conduct an aggressive policy to draw deposits. Under the circumstances, the Bank of Russia decided to squeeze Arksbank out of the banking services market," the Bank of Russia pointed out.
Banki.ru previously learned that Moscow-based Arksbank was cut off the Banking Electronic Speedy Payment (BESP) system. Arksbank claimed in early July that its operating offices in Moscow operate on a consultative basis because of some preventive measures. The number of the bank's Moscow units was reduced on July 11, 2016.
The media wired in March that upon Arksbank's inspection the Bank of Russia recommended that the lending institution should pile up additional provisions adequate to the accepted risks.
Arksbank is a member of the national deposit insurance system.
