Central Bank of Russia pulls two bank licenses
MOSCOW. Oct 5 (Interfax) - The Central Bank of Russia (CBR) has revoked the banking licenses held by Flora-Moscow Bank and Volgograd-based Joint-stock Commercial Bank KOR, effective October 5, the regulator said in press releases.
"Flora-Moscow has long been in the purview of the Bank of Russia due to the bank's transit and dubious transactions connected with cash-out transactions and overseas money diversion. The regulator took measures repeatedly to preclude the bank's involvement in suspicious activity of its customers. However, the effectiveness of AML/CFT in the credit institution was low. These circumstances showed that the management and owners of Flora-Moscow were reluctant to take any efficient measures in this regard. The Bank of Russia repeatedly (six times over the last 12 months) applied supervisory measures against JSC CB Flora-Moscow, including the restriction on household deposit taking," the regulator said.
The CBR said the business model of KOR was "largely designed to serve the interests of its shareholders and affiliated persons. Outstanding loans to companies explicitly or implicitly related to the ultimate beneficiaries of this credit institution accounted for about 50% of the credit portfolio. The operations of KOR were found to be non-compliant with the law and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism with regard to the completeness and reliability of information provided to the authorized body about operations subject to obligatory control. Moreover, the volume of suspicious transit operations conducted by the bank soared in the second quarter of 2018."
Bank Flora-Moscow was Russia's 436th largest bank by assets at the end of Q2 2018, according to the Interfax-100 ranking prepared by the Interfax Center for Economic Analysis. KOR ranked 397.
Both banks are members of the deposit insurance system and both have gone into temporary administration pending the appointment of a receiver.