By its Order No. OD-947, dated 17 June 2024, the Bank of Russia revoked the banking licence of Joint Stock Company Avtogradbank, or JSC Avtogradbank (Registration No. 1455, Republic of Tatarstan, Naberezhnye Chelny). The credit institution ranked 218th by assets in the Russian banking system.1
The Bank of Russia made this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that JSC Avtogradbank:
- violated federal banking laws and Bank of Russia regulations, due to which the regulator repeatedly applied supervisory measures against it over the last 12 months, including restrictions on a number of banking operations; and
- failed to comply with the laws on anti-money laundering and countering the financing of terrorism (AML/CFT).
For an extended period of time, JSC Avtogradbank’s operations were marked by an inefficient business model, reduction and deterioration of its assets, which, along with significant incentive payments to the top management of the bank, resulted in regular losses and a shrinkage of equity. Moreover, compliance with capital adequacy requirements was often ensured technically through various schemes.
The bank serviced the clients involved in large suspicious transactions aimed at funnelling money into the shadow economy. Furthermore, the credit institution committed numerous AML/CFT violations detected by the Bank of Russia both in the course of its remote supervision and as a result of its inspection.
The Bank of Russia will submit information about the bank’s transactions suggesting a criminal offence to the law enforcement agencies.
By its Order No. OD-948, dated 17 June 2024, the Bank of Russia appointed the State Corporation Deposit Insurance Agency (DIA) as a provisional administration to manage JSC Avtogradbank. The provisional administration will exercise its functions until a receiver3 or a liquidator is appointed.4 In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: JSC Avtogradbank is a participant in the deposit insurance system; therefore, its depositors5 will be compensated for their deposits in the amount of 100% of the balance of funds, but no more than a total of ?1.4 million per depositor (including interest accrued), taking into account the conditions stipulated by Chapter 2.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’.
Deposits are to be repaid by the DIA. Depositors may obtain detailed information regarding the repayment procedure 24/7 at the DIA’s hotline
1 According to the financial statements as of 1 June 2024.
2 The Bank of Russia made this decision due to the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within a year of the requirements stipulated by Articles 6, 7 (excluding Clause 3 of Article 7), and 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and taking into account repeated application within a year of measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
3 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
4 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
5 A depositor is a citizen of the Russian Federation, a foreign citizen, a person without citizenship, including those engaged in entrepreneurial activities, lawyers, notaries, and other individuals who opened bank accounts (deposits) to carry out professional activities stipulated by the relevant federal law, or a legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’ which concluded a bank deposit/account agreement with a bank, or any of the above mentioned persons in whose favour the deposit was made and/or who is the holder of a savings certificate, or an owner of a special account (special deposit) intended to form and use the fund of capital repairs of common property in an apartment building, opened in accordance with the requirements of the Housing Code of the Russian Federation.
| Zařazeno | po 17.06.2024 07:06:00 |
|---|---|
| Zdroj | CBRU |
| Originál | cbr.ru/eng/press/PR/?file=638542225183421636ENG_BANK_SECTOR.htm |
| Kategorie | Banking Sector |
| lang | en |
| guid | docid_39842 |
