The closures of the three banks, the biggest of which was Investbank - ranked 79th in Russia by assets - were linked to mounting payment problems and dubious operations, it said.
The closures come weeks after the central bank withdrew the license of Master Bank, a mid-sized Moscow bank, in the most potent demonstration that Governor Elvira Nabiullina is serious about halting rampant fraud and money laundering in Russia.
Dodgy banks are the conduit for illegal capital outflows that Nabiullina’s predecessor estimated at $50 billion last year.
Even so, Putin said on Dec. 12 that “nothing has been done” to implement an initiative he launched a year ago to stem capital flight that has sapped both investment and the Kremlin’s coffers.
Continuing closures have highlighted counter-party risks among Russia’s 900 banks, adding to negative sentiment on financial markets. The ruble fell to four-year lows following the latest closures.
The central bank has stripped around 30 banks of licenses since Nabiullina took the helm at the central bank in June.
The license withdrawals of Investbank, Smolensky bank (125th) and Project Finance Bank (129th) - their combined assets are 67 billion rubles ($2 billion), according to Interfax - did not come as a surprise.
- All the three have had experienced recent payment problems with depositors and creditors, the central bank said in three separate statements.
Meanwhile, Russia’s central bank left its key interest rate on hold at its monthly meeting on Dec. 13, maintaining its campaign against stubbornly high inflation even as the economy suffers its weakest growth in four years.
The bank said it expected inflation to fall in the first half of 2014 but not to reach its 5 percent target until the second half. Accordingly, it held the benchmark one-week minimum auction repo rate at 5.5 percent, leaving the key policy rate unchanged for the 15th month in a row.
hurriyetdailynews.com
13/12/13
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Russian Regulator Shuts Three More Banks in Clean-Up Drive...
ReplyDeleteMOSCOW, December 13 (RIA Novosti) – Russia’s financial regulator revoked the banking licenses of three mid-sized banks Friday as the authorities expand a banking sector crackdown.
The operations of Investbank, Russia’s 84th largest bank by assets according to finance website allbanks.ru, BPF Bank, the country’s 142nd biggest bank, and Smolensk Bank, the 109th largest bank, were all suspended, according to statements by Bank Rossii, Russia’s central bank.
Insurance payments to clients of the three banks, which will begin on December 27, will total 51 billion rubles ($1.6 billion), Russia’s Deposit Insurance Agency said Friday.
Almost 30 Russian banks have lost their licenses this year as the regulator seeks to tighten oversight of the country’s lenders and rein in shadow banking activity.
The central bank said that Investbank was guilty of false financial reporting and inadequate capital levels, while BPF was a threat to creditors due to its high-risk borrowing.
Smolensk Bank had not observed its obligations to creditors and depositors, while simultaneously “engaging in deals aimed at asset stripping,” according to the central bank.
The central bank’s move did not come out of the blue, with all three banks reportedly under financial pressure in recent days and weeks.
Investbank’s offices temporarily suspended operations in Russia’s westernmost region of Kaliningrad on Thursday after what the bank described in a statement as the “unfounded panic of depositors.”
BPF has had problems honoring obligations since November. Smolensk Bank has also had liquidity problems, and earlier this month requested financial assistance from the central bank.
In November the central bank revoked the license of major Moscow-based lender Master Bank, causing widespread problems with payment transactions across the country. The regulator said that Master Bank had been involved in money laundering and “large-scale suspicious operations.”.................http://en.ria.ru/russia/20131213/185517371/Russian-Regulator-Shuts-Three-More-Banks-in-Clean-Up-Drive.html
13/12/13