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Russia’s Central Bank revokes licenses from 2 credit institutions

July 11, 2014, 14:00 UTC+3 MOSCOW

CFC Bank and Ural Clearing Center violated provisions of laws prohibiting money laundering and terrorism financing

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Russia’s Central Bank building in Moscow

Russia’s Central Bank building in Moscow

© Sergei Shakhidzhanyan

MOSCOW, July 11. /ITAR-TASS/. Russia’s Central Bank (CBR) has revoked licenses from CFC Bank and non-banking credit institution Ural Clearing Center (UCC), the regulator said in a statement Friday.

CFC Bank, also known as Consumer Finance Company, and UCC violated provisions of laws prohibiting money laundering and terrorism financing, the regulator said.

UCC also did not ensure enough security while identifying clients, and was involved into large dubious cashless transactions, the central bank said.

CFC Bank is a member of the deposit insurance system, which means that each client will receive redemption of their deposits to the sum of up to 700,000 rubles ($20.5 thousand).

The Deposit Insurance Agency (DIA) said that it will start repaying compensations to the bank’s clients no later than on July 25.

UCC operated in Moscow, providing banking account maintenance and cashless currency exchange services for corporate clients, and had no individual clients.

July 7, the Russian banking watchdog has stripped another three credit institutions of their licenses.

The licenses were revoked from the St. Petersburg-based Finvest and Eurosib banks and the Moscow-based IstKom-Finance over their highly risky policies and failure to comply with banking legislation and Bank of Russia regulations, the regulator said in a statement.

Compensation payments to clients of Fininvest, Eurosib and IstKom-Finance, which are participants in the deposit insurance system, will start from July 21.

Fininvest held the 179th place in the Russian banking system while Eurosib ranked 652nd and IstKom-Finance 727th.


Improving the Russian banking system

The Russian Central Bank has taken active efforts in the past two years to restructure the domestic financial system and make it stable and resilient to market shocks. The regulator has paid special attention to financial institutions that are not large in size and conduct risky operations and violate capital adequacy and transparency requirements.

Since 2013, the Central Bank of Russia has revoked licenses from about 50 credit institutions that operated in Moscow and the Moscow Region, the North Caucasus and the Siberian Federal District.

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