The Central Bank took away the license. Why does the Central Bank revoke licenses from banks?
To stabilize the financial situation in Russia in connection with the progressing economic crisis, the Central Bank is taking specialized measures to improve the banking system. The meaning of these measures is the gradual withdrawal of weaker structures from the financial market, by revoking their licenses or completely liquidating them. Which banks are currently the weaker links in the Russian financial system and can cease to exist at any time will be discussed in this article.
Reasons for revoking a bank's license
The global “cleansing” of the Russian banking market began by the Central Bank back in September 2013. Since then, about three hundred banking structures have lost their financial license.
The main reasons for revocation of a certificate for banking activities are the following factors:
- low equity capital (less than 2 percent);
- violation by the bank of its own obligations to clients;
- carrying out actions contrary to Russian legislation;
- concealment of true income from the state;
- indication of false information in the tax return;
- downtime for one year or more (the bank does not carry out transactions due to the nature of its activities);
- when violations in the maintenance of banking records are identified during the inspection;
- systematic evasion of court-ordered obligations to their clients, and so on.
The combination of the above reasons or even the identification of one of them can serve as a significant reason for the Central Bank of Russia to decide to revoke the license of an unscrupulous bank. Although this action is preceded by a thorough check.
List of banks whose license may be revoked
The Central Bank plans to complete the rehabilitation measures in the financial sector by 2018. However, until this point, the Central Bank of Russia plans to reduce the number of banking organizations to 500. Information has already become publicly available about which tanks have already had their licenses taken away or plan to revoke their licenses in the period 2017–2018. Below is a list of them:
- JSC "Bulgar Bank" - lost its license on January 16, 2017;
- Uniastrum LLC was liquidated in the 1st quarter of 2017.
- Siberian company "Sirius" - license revoked on January 23, 2017.
- "Interkoopbank" - 05/29/2017
- JSC "Ivy Bank" - closed on May 29, 2017.
- "Moscow National Investment Bank" - 07/05/2017.
- Bank "Legion" - 07/07/2017
- "Premier Credit" - 07/10/2017. PJSC "YUGRA" - 07/28/2017.
According to the latest news, this fall the license may be revoked from such well-known banking structures as:
- "Summer Bank";
- "Vanguard";
- Euroinvest;
- GenBank;
- "Vesta";
- "HE WOULD";
- "Russian standard";
- "Sovincom".
Also at risk are:
- Bank "Anchorbank" issues low-quality assets, violations of obligations to clients have been observed.
- Tatfondbank, until recently, was among the top 50 best financial companies in the country, but lost a significant part of its personal capital.
- "Interregional Postal Bank" - the founders of the bank themselves submitted an application to revoke the license due to the unprofitability of their activities.
- "Intechbank" pursues a risky financial policy and therefore loses a significant share of its own funds.
What should depositors do if the bank’s license is revoked?
According to Federal Law No. 177-FZ, all bank deposits of individuals and legal entities must be insured against possible financial risks, including bankruptcy. This act regulates a provision that determines that if the license is revoked by the Central Bank, the depositor can return his funds through an agent firm, which is appointed by the Association of Insurers of Russia.
Such agent companies take care of user investments for 1 year after the bank’s bankruptcy. Therefore, the first thing investors should do if the license of the organization where their savings are stored is revoked is to visit the official resource of the DIA community and familiarize themselves with information about the designated receiver company. It is this organization that will deal with repaying the debts of the “burst” bank. In this case, users will receive compensation within two weeks in an amount not exceeding 1,400,000 rubles.
The list of banks whose licenses are being revoked continues to grow. What's happening?
Why is the Central Bank, which, in principle, has always performed the function of “overseer” of controlled institutions, is showing such activity today? How does this relate to events in the world, what should clients do and when will the purge end? Let's try to figure it out.
The massive “cleansing” of the banking sector began back in 2013. With the appointment of Nabiullina Elvira to the post of head of the Central Bank, more than 100 credit institutions have already lost their licenses. This activity was apparently due to the need to improve the financial side of the Russian economy and prepare for the deepening crisis. Moreover, not all banks closed due to dubious transactions and the lack of measures to normalize activities; most simply went bankrupt.
The first to fall under the threat was the famous Master Bank. In November 2013, this sensational case plunged thousands of branch depositors throughout Russia into panic. The stated reason officially sounds like “violation of laws against legalization and money laundering, facilitating terrorist operations.” Simply put, behind this lies the dubious and risky principles of credit policy, which the management of Master Bank was too carried away by, issuing loans to affiliated individuals and legal entities for almost 11 billion rubles. Of course, depositors, primarily organizations, paid for the sins of the liquidated bank.
Then, several more financial institutions closed in the same way: Business Development Bank, Bank24.ru, KBSR Dagestan, etc. In total, 46 banks were deprived of their licenses in 2013, 86 in 2014, 64 in 2015 (as of October 6).
Which banks can have their license revoked?
The list of violations is fixed by law and differs in the degree of seriousness of illegal actions:
Mandatory revocation occurs in the following situations:
- Loan capital is 2% less than required.
- At the time of the state registration of own funds of the banking structure below the authorized capital.
- It is not possible to pay all creditors on your own within 2 weeks.
- Unauthorized reduction of the authorized capital established initially to a value below the amount of funds at disposal.
Revocation is possible but not required in the following situations:
- Reporting was delayed and not submitted for more than 15 days.
- The report data contains false information - for example, the real picture of lending is not reflected, the figures are falsified.
- The previously issued license was obtained on the basis of inaccurate data.
- Carrying out activities that are not subject to a license.
- Court decisions on collections from customer deposits are ignored and not implemented.
- Other violations.
Fictitious rumors are also of great importance, which, if leaked to mass media, can cause panic and create an unpleasant situation for a particular credit institution. This has already happened with Investbank (occupied 80th place in the ranking of the largest Russian banks). It was the “duck” in the press that became the reason that most investors rushed to simultaneously withdraw their hard-earned money. The result is predictable. The Central Bank acted with lightning speed and the license was revoked.
What happens next?
After the work permit is taken away, the banking organization is subject to liquidation - voluntary if funds are available and forced (through bankruptcy) if there are no funds. In order not to lose their savings, depositors need to write an application for payment of money, and also find out through the DIA whether the bank being liquidated is included in the deposit insurance system.
If included, amounts within 1.4 million rubles. compensated by other (designated DIA) financial institutions. If not, the return procedure becomes much more complicated. In this case, it is more advisable not to seek justice on your own, but to seek help from qualified lawyers who know in practice how to make demands for payment of debts against a bankrupt.
Is there a blacklist?
Some experts suggest that the main Bank of Russia has a certain list, on the basis of which the Central Bank plans who is next in line to lose their license. Internet news is literally seething with various blacklists, even specific numbers and dates appear. Naturally, representatives and management of the Central Bank deny such ridiculous assumptions.
For reference, the official website is https://www.cbr.ru/.
Of course, everything does not happen suddenly and in one day. The preconditions develop long before the situation is resolved in an unpleasant way, and the bank is closed. It cannot be completely denied that the Central Bank is aware of specific institutions in which not everything complies with the established norms of the law. First, a thorough inspection is carried out, then, if violations are identified, the organization is given time to eliminate them. And only if the problem cannot be solved, drastic measures follow in the form of reorganization or revocation of the license. We have already told you what to do in the second case. In the first option, the institution is rehabilitated, and everyone wins.
Summarizing what has been said, it should be noted that even if some ratings exist, they will not be published in the public domain, so as not to aggravate the situation. But what should ordinary people do? Experts advise not to cooperate with small financial institutions, of which there have been too many divorces in recent years. It is safer to contact large, well-proven institutions - Sberbank, VTB24 and VTB, Alfa-Bank. But even these time-tested organizations, unfortunately, are not 100% immune from possible troubles. These are the realities of the economy, especially in our difficult times.
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As the regulator notes, the financial organization has been convicted of numerous violations of legislation on combating money laundering and the financing of terrorism. At the same time, in the third quarter of this year, the bank carried out a significant amount of dubious transit transactions for the purpose of cashing out funds.
According to the Central Bank, the main activity of the bank was receiving commission income from foreign exchange transactions and money transfers from individuals. At the same time, the loan portfolio in the structure of the bank’s assets occupied no more than 17% and was characterized by low quality - about 50% of issued loans were classified as problem and bad, the report says.
A temporary administration has been appointed at the bank. The powers of the executive bodies of the credit organization have been suspended.
As New Day reported, earlier today the Bank of Russia revoked the license of the Irkutsk East Siberian Transport Commercial Bank. The auditors found that the credit institution had almost completely lost its equity capital, and the cash register was missing 130 million rubles.
Moscow, information service RIA “New Day”
Moscow. Other news 10.19.18
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