World Economy

Russia Revokes Bank Licenses for Flouting Laws

Russia Revokes Bank Licenses for Flouting Laws
Russia Revokes Bank Licenses for Flouting Laws

The Bank of Russia made a decision to recall banking licenses of four Russian banks, the regulator said on Friday.

The decision to withdraw licenses of Moscow-based Gagarinsky, Klientsky and Stary Kreml banks and Krasnodar-based ENO bank was taken in connection with failure of credit institutions to comply with federal laws and regulatory acts of the Bank of Russia, Tass reported.

Furthermore, the above banks did not meet requirements of laws in the field of combating money laundering and terrorism financing, it said.

The banks pursued risky credit policy and did not establish appropriate provisions for possible losses under loans, the Central Bank said. Temporary administration was appointed in banks and powers of executive authorities of credit institutions were suspended.

Meanwhile, the replenishment of Russia’s Reserve Fund after 2018 will have an impact on the national monetary policy and prevent the ruble’s excessive strengthening, Finance Minister Anton Siluanov told reporters on Thursday.

He added it will also have a positive impact on competiveness of national products.

“When we speak about the Reserve Fund replenishment, this implies not only reserve formation but also a macroeconomic effect of the surplus of currencies the government buys in order to ameliorate the exchange rate and its policy,” the minister said.

He said before 2014, the ruble kept on strengthening which had a negative effect on competitiveness of Russian products.

“That is why the creation of reserves and the use of surplus oil and gas revenues in reserves is a macroeconomic component which won’t let the [ruble] rate strengthen,” he said.