Hrvatska narodna banka said Feb. 21 that it decided to approach the commercial court in Zagreb to open bankruptcy proceedings against TESLA ŠTEDNA BANKA d.d.

The Croatian central bank noted that as of Dec. 31, 2017, the lender had negative capital and its assets were worth less than its financial obligations. The regulator also noted that it is unreasonable to expect that any measures could prevent the lender's collapse within a reasonable time frame, and it is not in the public interest to rescue the bank.

Tesla Štedna Banka will be placed into provisional administration until the court decides to initiate bankruptcy proceedings in order to protect the assets of the lender, while its clients will not be able to accept or make payments from their accounts.

The assets of Tesla Štedna Banka stood at 1.5 million Croatian kuna at the end of 2017, equivalent to 0.0004% of total assets in the Croatian banking system, making the lender the smallest credit institution in the country, according to the regulator.

As of Feb. 21, US$1 was equivalent to 6.05 Croatian kuna.