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Russia’s Central Bank revokes licenses of two Moscow-based banking organizations

May 05, 2014, 10:42 UTC+3 MOSCOW
Russia's main financial watchdog continues its campaign against illegal banking activity in the domestic market
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© ITAR-TASS/Yuri Mashkov

MOSCOW, May 05. /ITAR-TASS/. The Central Bank of Russia (CBR) has revoked licenses for banking transactions from Moscow-based First Republican Bank, a participant in the deposit insurance system, and Atlas Bank, LLC, as of May 5, 2014. This reported the Russian financial watchdog and banking regulator, which has been conducting a campaign to curb illegal banking activity in the domestic banking sector since the previous year, shutting down dozens of banks for illegal deals.

First Republican Bank's risky assets

CBR’s decision was made as First Republican Bank failed to fulfil federal laws regulating banking activity and CBR’s regulatory acts and resulted unable to meet creditors’ demands on monetary liabilities.

The CBR noted that the First Republican Bank had carried out a highly risky crediting policy, making investments in low-quality assets. Because of dissatisfactory quality of assets not generating sufficient money flow the bank did not timely fulfil its liabilities to creditors and depositors. Chief executives and owners of the bank did not take effective measures to improve its activity and restore its financial position.

Atlas Bank fails to comply with law on countering funding of terrorism

Another crediting organization, whose license for banking activities has been revoked as of Monday, is Moscow-based Atlas Bank, LLC.

Such a decision regarding Atlas Bank has been made because the bank has repeatedly violated during one year the requirements under Article 7 (except Paragraph 3 of the Article 7) of the federal law “On countering criminally received incomes’ legalization (laundering) and funding of terrorism”.

According to CBR, Atlas Bank was not fulfilling the requirements of the legislation by not providing information about transactions subject to compulsory control to the relevant authority in time. In addition, the crediting organization did not take any measures to obtain data on purposes of establishing and type of business contacts between the clients and the bank.

Within 2013, Atlas Bank was involved in carrying out suspicious transactions related to transferring funds abroad, the overall volume of which made about 9 billion rubles ($251 million).

In accordance with CBR’s order, an interim administration has been appointed for Atlas Bank, which will be acting until a bankruptcy supervisor or an official receiver is appointed. The authority of the banks’ executive management is put on hold in accordance with Russia’s federal laws.

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