By its Order No. OD-1638, dated 9 October 2020, the Bank of Russia revoked a banking licence from LIMITED LIABILITY COMPANY BANK MAYSKIY, or LLC Bank Mayskiy (Registration No. 1673, Kabardino-Balkar Republic, city of Mayskiy; hereinafter, Bank Mayskiy). The credit institution ranked 350th by assets in the Russian banking system.1
The Bank of Russia took this decision in accordance with Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that Bank Mayskiy:
- violated federal banking laws and Bank of Russia regulations, and also understated the amount of loan loss provisions to be created, due to which the regulator repeatedly applied measures against it over the past 12 months, which included restrictions on household deposit-taking;
- failed to comply with the anti-money laundering and counter-terrorist financing laws. The credit institution failed to keep record of operations subject to obligatory control and submit to the authorised body information thereon in a timely manner.
The Bank of Russia repeatedly sent the credit institution orders to make a proper assessment of risks assumed and to reflect its real financial standing in the financial statements. The inspection revealed instances of fictitious repayment of outstanding loans in order to conceal the actual amount of overdue debt and to artificially create interest income of the credit Institution.
The Bank of Russia will submit information about the bank’s transactions suggesting a criminal offence to law enforcement agencies.
The Bank of Russia appointed a provisional administration3 to Bank Mayskiy for the period until the appointment of a receiver4 or a liquidator5. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
Information for depositors: Bank Mayskiy is a participant in the deposit insurance system; therefore, depositors will be compensated6 for their deposits in the amount of 100% of the balance of funds but no more than a total of 1.4 million rubles per depositor (including interest accrued), except for the cases stipulated by Chapter 2.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’.
Deposits are to be repaid by the State Corporation Deposit Insurance Agency (hereinafter, the Agency). Depositors may obtain detailed information regarding the repayment procedure 24/7 at the Agency’s hotline (8 800 200-08-05) and on its website (https://www.asv.org.ru/) in the Deposit Insurance / Insurance Events section.
1 According to the financial statements as of 1 September 2020.
2 The Bank of Russia made this decision because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within a year of the requirements stipulated by Articles 6 and 7 (excluding Clause 3 of Article 7) of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and repeated application within a year of measures stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
3 In accordance with Bank of Russia Order No. OD-1639, dated 9 October 2020.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.
6 Depositor means a citizen of the Russian Federation, foreign citizen or person without citizenship, including those who are engaged in entrepreneurial activity, or legal entity specified in Article 5.1 of the Federal Law ‘On the Insurance of Deposits with Russian Banks’, which concluded with a bank a bank deposit/account agreement, or any of the above mentioned persons in whose favour the deposit was made and (or) who is the holder of a savings certificate, or an owner of a special account (special deposit) designed to form and use the fund of capital repairs of common property in an apartment house opened in accordance with the requirements of the Housing Code of the Russian Federation.