UPDATE2: Central bank says revokes license from Russia’s 42nd largest bank

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MOSCOW, Mar 3 (PRIME) -- The central bank has revoked banking licenses held by Tatarstan-based Tatfondbank, Russia’s 42nd largest by assets, from March 3, the regulator said in a statement on Friday.

Tatfondbank, with assets of 221 billion rubles, is a member of the deposit insurance system, which means that each depositor may receive up to 1.4 million rubles in compensation.

The central bank revoked licenses from Intechbank and Bank Ankor, ranking 130th and 227th by assets, respectively. Both banks are also located in the republic of Tatarstan and members of the deposit insurance system.

Andrei Piskunov, the director of the sovereign and regional rating department at Analytical Credit Rating Agency (ACRA), said the banking system of the republic will not be hurt by the revocations.

“The financial stability of the region will not suffer as the banks did not perform transactions connected with the republic’s budget. The bulk of operations there are conducted via AK BARS Bank,” he said, adding that AK BARS Bank is likely to occupy the free market share.

The three banks did not comply with laws on regulation of banking activity and the central bank’s regulations and conducted highly risky lending policies, the central bank said.

The central bank also cancelled a license of Moscow-based bank Interregional Post Bank, Russia’s 475th largest, following a voluntary liquidation decision by its owners and on their request, the authority said. The bank is also a member of the deposit insurance system.

Payments to depositors of Bank Ankor and Interregional Post Bank will start no later than on March 17, the Deposit Insurance Agency (DIA) said.

Oleg Vyugin, the former Deputy Finance Minister and a member of the board of B&N Bank said that the collapse of the banks will not affect stability of the Russian banking system.

(58.4067 rubles – U.S. $1)

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