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Russian central bank cracks down on microfinance firm

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Russian central bank cracks down on microfinance firm

Russia's Central Bank of the Russian Federation has removed Domashnie Dengi LLC from the register of microfinance institutions, banning it from operating on the financial market.

The regulator noted in its Aug. 30 filing that the troubled microfinance company's financial reporting was unreliable, and that it repeatedly violated legislative and regulatory requirements, including maximum risk exposure to a single borrower and affiliated entities.

Demashnie Dengi also took deposits from retail customers and individual entrepreneurs despite the Central Bank of the Russian Federation imposing a regulatory ban on such transactions, Kommersant reported Aug. 31.

Domashnie Dengi hopes to meet with the regulator to resolve the issues and wants to continue its operations to pay off its debt, the firm's representative told Kommersant.

Acting on behalf of lenders it oversees, the Russian Deposit Insurance Agency recently launched bankruptcy proceedings against the company.