MOSCOW, August 22 (Itar-Tass) - The Central Bank of Russia /CBR/ has revoked the license of the Moscow-based Municipal Investment Construction Bank /Instroibank/, the regulator said in a statement on Thursday.
The decision was made in connection with the bank’s failure to comply with the federal laws on banking and CBR instructions.
The CBR said Instroibank's statements did not show its commitments while its reserves did not increase proportionately to the risks incurred.
It also failed the CBR deadline for the size of the authorized capital and proprietary resources. The bank's administration took no measures to rectify the situation, the regulator said.
An interim administration has been appointed to manage Instroibank.
The ASB deposit insurance agency reported that payments to bank depositors would begin not later than September 5. The bank is committed to pay 100 percent of insurance indemnity on all deposits which do not exceed 700,000 roubles. Instroibank is a member of the national deposit insurance system
The sums in excess of the amount compensated by insurance will be paid to the owners as first priority creditors during the liquidation of the loan institution.
Applications for indemnity can be submitted during the whole period of liquidation which averages two years.
Also on Wednesday, the CBR revoked the license of Depositny Kreditny Dom for the same reasons and appointed an interim administration. It will run Depositny Kreditny Dom until the appointment of bankruptcy supervisor.