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Russia's Central Bank revokes licenses of two nonperforming banks

July 21, 2015, 9:28 UTC+3 MOSCOW
Moscow-based Time Bank and United Bank of Industrial Investments (UBII) failed to comply with federal laws and regulatory acts of the Bank of Russia
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The Bank of Russia

The Bank of Russia

© Pavel Smertin/TASS

MOSCOW, July 21. /TASS/. The Bank of Russia made a decision to recall banking licenses of two Russian banks, the regulator said on Friday.

The decision to withdraw licenses of Moscow-based Time Bank and United Bank of Industrial Investments (UBII) was taken in connection with failure of credit institutions to comply with federal laws and regulatory acts of the Bank of Russia. Furthermore, the above banks did not met requirements of laws in the field of combating money laundering and terrorism financing.

Time Bank pursued risky credit policy and did not establish appropriate provisions for possible losses under loans, the Central Bank said. Furthermore, the bank was involved in doubtful transit operations on cash withdrawals abroad in huge amounts.

In its turn, UBII invested funds into poor-quality assets and failed to create provisions appropriate for assumed risk, the regulator said. The credit institution failed to timely honor its commitments to creditors due to the unsatisfactory quality of assets that did not generate a sufficient cash flow. At the same time, UBII presented reports with material misstatements to the supervising authority, the Central Bank said.

Temporary administration was appointed in banks and powers of executive authorities of credit institutions were suspended.

The banks take part in the deposit insurance system.

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