The Bank of Russia decided to strip Instroybank of its banking license as of August 22, the regulator’s PR department reported.
Furthermore, the Bank of Russia adopted a decision to revoke a banking license held by non-banking lending institution Depositny Kreditny Dom (DKD).
The Bank of Russia took a decision to revoke the lender’s banking license as Instroybank failed to comply with the federal laws regulating banking activities and CBR’s statutory acts, the failure to timely meet the requirements imposed by the Federal Law “On Insolvency (Bankruptcy) of Lending Institutions”, the Bank of Russia’s demands to bring the charter capital and equity (capital) into compliance, and also given numerous application during the year of the measures provided for by the Federal Law “On the Central Bank”.
Instroybank failed to reflect in its balance sheet its obligations and formed no reserves against possible loan losses that are adequate to the risks assumed. The lending institution failed to fulfill the demand of the Bank of Russia’s order within the statutory period to bring into compliance its charter capital and equity. The lending institution’s management and owners took no necessary measures to restore its financial standing. Under the circumstances the Bank of Russia fulfilled the requirement of the Federal Law “On Banks and Banking Activities” to revoke the lending institution’s banking license.
A temporary administration team was appointed to run the bank. In accordance with federal laws the powers and authority of the lending institution’s executive bodies were suspended.
DKD, in turn, formed no provisions against possible loan losses that are adequate to the risks assumed. The formation of the reserves in line with the requirements of statutory acts caused a decline in the lending institution’s equity (capital) below the minimal threshold of a lending institution’s charter capital as specified by the Bank of Russia on the date of state registration. The bank’s management and owners took no measures to improve the institution’s financial standing. Under the circumstances the Bank of Russia fulfilled the duty as to revoke the lending institution’s banking license.
