Russian central bank says revokes licenses from 2 small banks

MOSCOW, Dec 4 (PRIME) -- The central bank has revoked banking licenses from Moscow-registered Bank European Standard and Krasnodar-based Novopokrovsky Bank, Russia’s 539th and 208th largest by assets as of October 1, respectively, the regulator said in a statement on Monday.

Bank European Standard conducted shady operations that were not reflected in the financial data that the bank provided to the regulator.

In November, a central bank check discovered a large theft from the bank’s cash register. The central bank ordered European Standard to form reserves adequate to the loss, and the bank’s capital adequacy shrank significantly. Activity of the bank’s managers and owners had signs of illegal actions, including conduction of deals aimed at withdrawal of liquid assets, which inflicted financial damage on creditors and depositors of the bank.

Novopokrovsky Bank did not comply with laws and regulatory acts aimed at prevention of money laundering and terrorism financing. The bank’s business model was focused on aggressive attraction of clients’ money on deposits and its investment in low-quality assets.

The regulator registered dishonest practices of the managers and owners of the bank, which conducted shady operations, which failed to comply with the orders of the central bank to form reserves against possible losses that were adequate to risks that the bank took.

Both banks are members of the deposit insurance system, which means that each depositor may receive up to 1.4 million rubles in compensation.

(58.5182 rubles – U.S. $1)

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