Български Русский English
Bank housekeeping: Russian regulator shuts down 3 more lenders
Friday, 13 December 2013 12:06
Published time: December 13, 2013 11:06
Edited time: December 13, 2013 12:51
Bank housekeeping: Russian regulator shuts down 3 more lenders

The Investbank building on Leninsky Avenue in Kaliningrad (RIA Novosti / Igor Zarembo)

Russia’s Central Bank (CBR) has revoked the licenses of three mid-sized banks on Friday, which brings the total to 30 lenders that have been closed down under the CBR crusade against dubious lenders since the start of the year.

Licenses were withdrawn from Investbank, Smolensky Bank, Russia’s 125th largest, and Project Finance Bank, the country’s 129th biggest bank. Individual deposits total $2.2 billion (70 billion rubles), according to the Deposit Insurance Agency (DIA).

Elderly clients broke through the door of Investbank, office windows were smashed, and hundreds of people rushed to enter the bank, only be refused in Kaliningrad.

The regulator blamed the lenders for distorting their financials, as well as poor financial standing.

“Any license withdrawal is a shock for us. It’s clear that it’s the measure of last resort, used only when all other measures are exhausted,” said the First Deputy Head of the CBR Aleksey Simanovsky.

While the banks’ assets will be frozen, the DIA has promised to reimburse customers before the New Year.

Bank housekeeping: Russian regulator shuts down 3 more lenders

Under DIA rules, each customer is insured up to $21,800 by the state. The DIA has an estimated $5.5 million bill (180 billion rubles) to pay out to customers, and if the agency runs out of money, it can borrow from the Central Bank of Russia (CBR), according to Vesti 24.

Nearly 30 Russian banks have lost their licenses this year, with 27 of them being revoked under the new Central bank Chair Elvira Nabiullina, who took office in June. Tighter controls over financial institutions led to 43 banks losing their licenses in 2009, followed by 17 banks in 2010, 18 in 2011, and 16 in 2012.

The license withdrawals have not come as a surprise, after the Central Bank revoked the license of Master Bank, which was suspected of illegally cashing $61 million (2 billion rubles) on November 20.

After the Master Bank fallout, Nabiullina spooked investors and markets when she said it “isn’t the only one”, causing nervous speculation in the banking community on which was next.

Before the decision was taken and the order to revoke the licenses was made official, the president of VTB 24, Mikhail Zadornov said many of the top-50 Russian banks are on “the verge of bankruptcy.”

Continuing closures have highlighted counter-party risks among Russia's 900 banks, adding to negative sentiment on the financial markets. The ruble fell to four-year lows following the latest closures.

Separately, the CBR will take a decision on Friday on its interest rate, which will likely remain unchanged at 5.5 percent, as the ruble remains weak and inflation high, nearing 6.5 percent.

The crackdown came a day after President Vladimir Putin called for stricter penalties on companies that register outside Russia which leaks $111 billion offshore.

President Vladimir Putin’s fight to ‘de-offshore’ Russia’s economy is an internal measure to boost budget revenues, by keeping capital inside Russia and taxable.

Worldwide, Russia tops the list in illegal capital flight, second only to China, according to a study by Washington-based Global Financial Integrity data. Between 2002-11, Russia lost a cumulative $881 billion in illicit financial flows out of the country.

Severodvinks: The place where Russian nuclear submarines are born

article thumbnail

Pravda.Ru journalists have recently visited the city of Severodvinsk, one of the centers of the Russian shipbuilding industry, one of the main bases of the Northern Fleet, from where submarines would set off for their missions. The city used to be one of the most secret places in the USSR. Nowadays [ ... ]


Boeing to Discuss Grounding of 737's With Russia's Transport Agency Friday

article thumbnail

Russia12:57 06.11.2015Get short URLMOSCOW (Sputnik) — The Boeing Сompany will meet Friday with Russia's Federal Air Transport Agency (Rosaviatsia) to discuss the reasons for its 737 model being suspended from use in Russia by the Interstate Aviation Committee, a Boeing communications offic [ ... ]


Is there a need for US warships near Sochi?

article thumbnail

Two US warships whose task is to provide assistance to Russia in case of emergency during the Winter Olympics in Sochi have arrived in the Black Sea region, the Pentagon reported. The security situation around the Games is much discussed in the West, and a new rally on the Maidan is planned for the [ ... ]


source: http://rt.com/business/russia-bank-revoke-license-184/

 

Advertisement