The grounds on which the Bank of Russia can revoke a bank's license to carry out banking activities are regulated by Article 20 of the Federal Law “On Banks and Banking Activities”. Bank of Russia regulations establish the procedure for revoking banking licenses.
Instructions
Step 1
The reasons why the Bank of Russia has the right to revoke the bank's license are:
Violation of federal laws, regulations and orders of the Bank of Russia.
Step 2
Failure to provide information.
Step 3
Submission of incomplete or inaccurate information.
This wording can only be given by an audit company when conducting a mandatory check. Factors that influence the opinion of users of the financial statements are material. Users can be contributors, shareholders, investors, creditors. For example, in the financial statements, the bank indicates a monthly increase in profitability of 5%. In this case, investors may be interested in the specified bank as an investment object, invest capital and expect profit. However, in reality, the bank has a monthly loss and hides this by providing inaccurate financial statements. And the capital invested by investors was irrationally used and irretrievably lost. The possible outcome of the activity of such a bank is bankruptcy and the inability to return the investment. And as a result, investors do not trust not only this bank, but also the entire banking system of the state.
Step 4
Taking actions that create a real threat to the interests of depositors and creditors.
Such actions, in particular, may be the implementation of a too risky credit policy by a commercial bank, and not creating adequate reserves, taking into account possible losses. It is no secret that the percentage of non-repaid loans can reach 30%. And with an irrational management of the bank's assets, an illiterate lending policy, there may be a shortage of funds to pay off the bank's obligations to depositors, shareholders, creditors. As a result, unprofitable activities and bankruptcy.
Step 5
Therefore, strict control by the Bank of Russia is manifested in measures aimed primarily at stabilizing the state banking system and the investment attractiveness of the state as a whole.
If the above violations are identified, the regulatory authorities will oblige the Bank of Russia to revoke the bank's license.
