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Russian regulator puts Tatfondbank into provisional administration

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Russian regulator puts Tatfondbank into provisional administration

The Central Bank of the Russian Federation placed PJSC Tatfondbank into provisional administration by the Deposit Insurance Agency for six months, starting Dec. 15, while suspending the rights of the lender's shareholders and powers of its management bodies.

The regulator also imposed a three-month moratorium on the claims of the bank's creditors. The moratorium constitutes an insured event, with payments of compensations to deposit holders to start within 14 days.

Faced with the outflow of deposits, the struggling lender had introduced limits on cash and deposit withdrawals before suspending its cash and settlement services. Several rescue options for Tatfondbank have reportedly been discussed, including a potential merger with PAO AK Bars Bank, denied by the latter, as well as financial rehabilitation with the participation of the main shareholder, Russia's Republic of Tatarstan.

It could take a while before the final decision on the fate of the lender is taken, and the revocation of its license is very likely, as the hole in its balance sheet amounts to around 120 billion Russian rubles, Kommersant reported Dec. 15.

As of Dec. 14, US$1 was equivalent to 61.19 Russian rubles.