MOSCOW, Nov 14 (PRIME) -- The Russian central bank has recalled the license of Moscow-based UM-Bank, ranked 293d by assets as of November 1, and Bank Moskva, ranked 431st, the authority said in a statement on Wednesday.
The structure of UM-Bank’s funding consisted of 50% of retail deposits, while the bank invested in low-quality assets -- 70% of the loan portfolio was dubious or jeopardized. The bank understated the scope of the credit risk, which is why the central bank ordered it to boost reserves by several times. UM-Bank also made non-transparent transactions to inflate capital.
The amount of dubious transactions of Bank Moskva soared in April–June, half of them resulted in illegal cash withdrawals by retail outlets in favor of third parties. Several circumstances signaled an intentional nature of the bank’s involvement in the transactions.
The banks are participants of the deposit insurance system, which means that each depositor is entitled for an up to 1.4 million ruble compensation.
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