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Russia’s Central Bank revokes 2 more licenses in banking sector clean-up

January 29, 2015, 19:09 UTC+3 MOSCOW

The licenses were revoked from AkademRusBank and VLBANK as part of efforts to clean up the domestic banking sector from inefficient operators

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© Pavel Smertin/TASS

MOSCOW, January 29. /TASS/. Russia’s Central Bank has stripped two more banks of their licenses in a continued effort to clean up the domestic banking sector and make it financially healthy, the regulator said in a statement on Thursday.

The licenses were revoked from the Moscow-based credit institution Akademichesky Russkiy Bank (AkademRusBank) ranked 642nd by assets in the Russian banking system and Your Personal Bank (VLBANK) based in Ust-Kut in the East Siberian Irkutsk Region and ranked 504th by assets.

The regulator revoked the license from AkademRusBank due to the credit institution’s inability to satisfy creditors’ claims on its money liabilities and its involvement in clients’ dubious operations for withdrawing money from Russia, the Central Bank said in a statement.

VLBANK was stripped of its banking license because of its failure to comply with federal banking laws and Bank of Russia regulations and inability to meet creditors’ claims on monetary obligations, the statement said.

The large-scale effort to clean up the domestic banking sector from inefficient operators started with the appointment of Elvira Nabiullina as the Central Bank chief in June 2013. The efforts aim to make the country’s banking system financially healthy 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.

The Central Bank head has said a decision on license revocation is an "extreme measure" when all the other methods of "influence on a particular bank have been used up."

The Central Bank chief said in late November that most of the work to clean up the banking sector had been done.

There were a total of 842 banks in Russia as of December 1, 2014.

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