The Bank of Russia decided to revoke as of December 30, 2014 a banking license held by Bank Volga-Credit (Registration No. 1153), the regulators press service reported.
The Bank of Russias decision was driven by the lending institutions failure to comply with the federal laws regulating banking activities and also CBRs statutory acts, because its capital adequacy ratio fell below 2% and its equity declined below the minimum threshold set by CBR on the date of the lending institutions state registration and due to the application of the measures specified by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
Based on the regulators data, the lender conducted a high-risk lending policy and piled up no loan loss provisions commensurate with the accepted risks. Moreover, the lending institution reflected in its accounting records actually missing securities. In the upshot, while fulfilling demands of the supervisory body to compile provisions adequate to the accepted risks the lending institution fully lost its equity.
“In the middle of December 2014 Bank Volga-Credit virtually suspended its activity, including operations with clients accounts and deposit holders. The banks executives and owners took no measures to restore its activities. Under the circumstances, on the basis of Article 20 of the Federal Law “On Banks and Banking Activities” the Bank of Russia fulfilled its obligation to revoke the lending institutions banking license," the regulators press service reported.