On June 17, 2024, the Bank of Russia revoked the banking license of Joint Stock Company Avtogradbank (JSC Avtogradbank), as per Order No. OD-947. The institution ranked 218th by assets in the Russian banking system.
The revocation was based on Clauses 6 and 6.1 of Part 1 of Article 20 of the Federal Law 'On Banks and Banking Activities.' The decision stemmed from JSC Avtogradbank's violations of federal banking laws and Bank of Russia regulations. These infractions led to repeated supervisory measures against the bank over the past year, including restrictions on various banking operations. Additionally, JSC Avtogradbank failed to comply with anti-money laundering and counter-terrorism financing (AML/CFT) laws.
JSC Avtogradbank had been operating under an inefficient business model for an extended period, which led to a reduction and deterioration of its assets. Significant incentive payments to top management resulted in regular losses and equity shrinkage. Compliance with capital adequacy requirements was often achieved through technical schemes.
The bank also serviced clients involved in large suspicious transactions aimed at funneling money into the shadow economy and committed numerous AML/CFT violations detected by the Bank of Russia during remote supervision and inspections.
The Bank of Russia will submit information about potential criminal offenses related to JSC Avtogradbank’s transactions to law enforcement agencies.
Following this development, by Order No. OD-948 dated June 17, 2024, the Bank of Russia appointed the State Corporation Deposit Insurance Agency (DIA) as provisional administrator for JSC Avtogradbank. This administration will function until a receiver or liquidator is appointed, with executive powers at the credit institution being suspended in accordance with federal laws.
Regarding depositors, JSC Avtogradbank participates in the deposit insurance system. Depositors will be compensated for their deposits up to ₽1.4 million per depositor, including accrued interest, as stipulated by Chapter 2.1 of the Federal Law 'On the Insurance of Deposits with Russian Banks.'
Deposits will be repaid by DIA, and depositors can obtain detailed information regarding repayment procedures via DIA's hotline (8 800 200-08-05) or its website (https://www.asv.org.ru/) under the Deposit Insurance/Insured Events section.
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