Why did Russia shut down two more banks

8 Feb

Russia shuts down two more banks

Moscow (AFP) – Russia’s central bank said Monday it had revoked the licenses of two more banks as part of government efforts to consolidate the sector as economic troubles mount.

Russia’s 67th lender by assets, Intercommerz had failed to adequately assess risks despite the poor quality of its assets, the central bank said.

“At the same time the bank was involved in dubious transactions,” it added.

The Bank of Russia also said it had revoked the license of a smaller lender, Alta-Bank.

The country’s 186th bank by assets, Alta-Bank had failed to meet its obligations to creditors, the central bank said.

The Russian authorities have been trying to clear the banking sector of hundreds of fragile banks which are often found to employ doubtful or illegal practices.

The ruble’s recent fall has exacerbated this, leading to dozens of bankruptcies in the sector.

Last month, the Russian authorities declared Vneshprombank, the country’s 40th-biggest lender by assets, insolvent. The bank counted several members of the country’s political elite as clients.

The central bank said it withdrew Vneshprombank’s licence because of its financial difficulties and involvement in money-laundering.

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