Sodbiznesbank scandal continues

The head of the Association of Russian Banks, Garegin Tosunyan, said at a press conference on Wednesday that he did not consider the situation around Sodbiznesbank, a commercial bank, a system problem.

In Mr. Tosunyan's opinion, it is normal that the Central Bank and the Federal Service for Financial Monitoring had questions for Sodbiznesbank. "But the inadequate reaction of the bank's representatives exacerbated the situation," Mr. Tosunyan said.

Mr. Tosunyan also appealed to the regulatory bodies not to make rushed conclusions. He recalled that the head of the financial monitoring service, Viktor Zubkov, said that there were similar claims against ten more Russian commercial banks.

"Yes, there are banks we have questions for," Mr. Tosunyan said. "But one cannot speak about a chain of bankruptcies in store."

He added that a possible bank crisis in Russia had been excluded.

On May 13, the Central Bank stripped Sodbiznesbank of its banking license for failure to observe federal banking laws and normative acts of the Bank of Russia. The bank was also charged with multiple violations of a number of provisions of the federal law "On Counteracting Money Laundering and Terrorism Financing."

In accordance with the law, the recall of a license automatically cancels all the bank's obligations. A group of armed individuals seized the bank's building preventing the temporary administration, appointed by the Central Bank, from fulfilling its duties.

Sodbiznesbank was founded in 1991. It had 2 billion rubles in available capital and in 2002 it ranked sixth among the 30 leading in its business activities. The bank serviced 35,000 clients and it had over 70,000 bank accounts.