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Central Bank of Russia purges private banks

This results in the capital flow in the state-owned banks

MOSCOW, December 25. /ITAR-TASS/. The Central Bank of Russia (CBR) has revoked the licenses from two more banks - Askold and Rublevsky. The former bank is involved in the deposit insurance system under which up to 700,000 rubles (about $21.4 thousand) are guaranteed to be returned to the depositors, whereas the Rublevsky bank is not involved in this system and did not attract the monetary funds from people. From the beginning of the year the CBR has already revoked the licenses from 29 banks.
The licenses were revoked from these banks due to the violation of the legislation and their bad financial situation, Rossiiskaya Gazeta daily reported. Rublevsky failed to pay its debts and is found to be involved in suspicious financial transactions. Askold has terminated its operation from mid-December 2013 after losing fully its capital base. The CBR estimates the insurance liability of the state corporation Deposit Insurance Agency at 1.5 billion rubles (about $45.9 million).

The revocation of the license from the Askold bank did not come unexpected on the market, Kommersant daily noted. It was incorporated in one group with the Smolensky bank that had recently been stripped of its licence and has stopped its operation almost after the revocation of the licence from the head lending institution. The reason for the revocation of the licenses is the same - the full lack of capital. According to official CBR reports, the revocation of the licence from the Rublevsky bank is its inability to meet the monetary liabilities to the creditors and the involvement of the bank in suspicious financial transactions.

So, the CBR continues to purge the market from ‘ill’ banks, Moskovsky Komsomolets daily noted. However, the coin has the opposite side. The depositors have recently been shutting down actively their deposits at the private banks and have been opening their deposits at the state-owned banks. According to Fitch Agency, the capital flow from the deposits has made about one trillion rubles (about $30.6 billion) last November.

The experts polled by the daily believe that the revocation of licenses from small banks (Askold is ranked at the 514th position in terms of amount of its assets, Rublevsky - 662nd position) may result in the monopolization of the market.

“The state authorities actually do not tackle such problems as the growth of credit portfolios and the operation of the banks thanks to taking foreign loans. The state authorities are just providing unequal conditions in the banking sector, thus violating the competition and worsening conditions for the bank clients,” Moskovsky Komsomolets daily quoted Director of the Banking Institute of the Russian Higher School of Economics Vasily Solodkov as saying.

 

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