The Bank of Russia took such an extreme measure — revocation of the banking licence — because of the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, revealed facts of significant unreliability of the reporting data, inability to meet the creditors’ claims on monetary liabilities and taking into account the repeated application over the past year of supervisory measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’. Pursuant to Article 20 of the Federal Law ‘On Banks and Banking Activities’, the Bank of Russia revoked the banking licence from the credit institution.
CB Art-Bank LLC implemented high-risk lending policy and did not create loan loss provisions adequate to risks assumed. Due to the loss of liquidity, the Bank failed to timely honour its liabilities to creditors. Besides, CB Art-Bank LLC presented significantly unreliable financial statements to the Bank of Russia and failed to meet the supervisor’s requirements to disclose its real financial standing. The management and owners of the credit institution have not taken measures required to normalise its activities.
By its Order No. OD-2124, dated 18 August 2014, the Bank of Russia has appointed a provisional administration to CB Art-Bank LLC for the period until the appointment of a receiver pursuant to the Federal Law ‘On the Insolvency (Bankruptcy) of Credit Institutions’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies are suspended.
CB Art-Bank LLC is a member of the deposit insurance system. The revocation of banking licence is an insured event envisaged by Federal Law No. 177-FZ ‘On Insurance of Household Deposits with Russian Banks’ regarding the bank’s liabilities on household deposits determined in accordance with the legislation.
As of 1 August 2014, CB Art-Bank LLC ranked 674th by assets in the Russian banking system.
