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"Financial intelligence" to conduct thorough cleanup

Resistance of the Central bank of Russia and SodBusinessbank (SBB), which has lost its license due to criminal money-laundering, is aggravating. On Friday, Central bank accused SBB in an attempt to misguide its clients and counteract temporary administration.

In the meantime, head of Federal services of financial monitoring Victor Zubkov announced that he was aware of another ten banks that violate “anti-money-laundering” law.

According to Zubkov, neither one of these banks provides Financial monitoring service with information concerning its financial operation, which they are required to do by law.

Federal services of financial monitoring intend to show no mercy when dealing with the banks that violate the law of counteraction of legal proceeds that have been acquired illegally. According to an earlier report made by Zubkov, he considers central bank’s actions valid in regards to SodBusinessBank, since the latter has violated the law.

Head of the “financial intelligence” states that the situation with SodBusinessBank will make other Russian commercial banks to follow the law and fight the dirty money. “It is important for the rest of the banks to take similar actions and to check whether everything is done in strict accordance with the law in their banks,” remarked Zubkov in his earlier report.

However, chairman of SBB Roman Petrov has already claimed that he considers such license suspension unlawful and promised to appeal the decision in court. Central Bank in turn comments in its press-release that SBB “attempts to mislead the public regarding the current situation, declaring that the bank is closed due to technical difficulties” and that the bank will resume its work in several days. Also, Central Bank notes that, by law, such license suspension is not subject for renewal.

“Gazeta” considers it is highly unlikely that the first thirty banks on the list will turn out to be just as delinquent, “since it is extremely difficult to build a huge business by making money off of money exchange and ‘shady activity’”. However, at the same time it appears just as obvious that a part of investors will not retrieve their money from banks “just in case”. This may affect the entire Russian banking system which has just earned people’s trust.

However, according to the president of the Russian Banks Association Garegin Tosunyan, there exists an alternative to suspension of a bank’s license. “In some cases, it is enough just to change the bank’s leadership. The procedure is relatively simple. …For a bank losing a license is equivalent to death,” explains the banker.

When a bank changes its leadership, it continues to function properly. More so, it isn’t necessary to make the news public. In case the credit facility finally looses its license, there remains no other way out but to declare bankruptcy and further liquidation of the credit facility.

License suspension is the final touch not only because the bank stops its existence. Credit facilities have certain responsibilities that, in case of bankruptcy, can never be fulfilled at all. Aside from creditors, there are also investors, people who will receive their deposits at best. In worse case scenario, they will lose 30-40% of all their savings. Currently, the system of endowment insurance is not working in Russia.

Based on materials of Russian inform agencies

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