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Russian central bank revokes 2 banking licenses

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Russian central bank revokes 2 banking licenses

TheCentral Bank of the RussianFederation on April 8 revoked the banking licenses held byJSC FIA-Bank andSoveren Bank.

The centralbank said it canceled FIA-Bank's license after the lender's capital adequacyratio fell to under 2% and its equity capital dropped below the minimumrequired level. Pointing to FIA's low asset quality, the central bank addedthat it was unfeasible to launch a financial recovery program for the lender.  

Morethan 95% of FIA-Bank obligations to households and individual entrepreneurswill be fully covered by Russia's deposit insurance system.

Thecentral bank also revoked the license of Moscow-based Soveren Bank due to itsrisky lending policy and because it violated Russian regulations designed toprevent money laundering and financing of terrorism.

Bothlenders were put into provisional administration until the appointment of areceiver or a liquidator. FIA-Bank and Soveren Bank ranked 175th and 485th,respectively, in the Russian banking system in terms of the size of theirassets.