The Central Bank of the Russian Federation revoked banking licenses held by Commercial Bank Novopokrovsky LLC and Moscow-based Commercial Bank European Standard LLC, and placed the lenders into provisional administration until the appointment of a receiver or a liquidator, the regulator said Dec. 4.
Novopokrovsky's license was canceled because the bank failed to comply with anti-money laundering and counterterrorism legislation. In addition, the bank pursued a business model based on aggressively attracting household funds and investing them into poor-quality assets.
Meanwhile, European Standard Bank was involved in "shadow" currency exchange operations that were not recorded and not reflected in statements submitted to the central bank. The regulator also discovered in November that a large amount of cash had been stolen from the bank, and the creation of additional provisions for liabilities under the missing assets resulted in the loss of the lender's capital.
Both banks are members of the Russian deposit insurance system, and their retail clients are set to receive compensation of up to 1.4 million Russian rubles each for deposits held at the lenders. Novopokrovsky ranked 208th and European Standard Bank was 539th by total assets in the Russian banking system.
As of Dec. 4, US$1 was equivalent to 58.88 Russian rubles.
