Bank depositors take up arms to protect their savings


On April 21, the Bank of Russia revoked the license for banking operations from the Moscow-based bank Zapadny ("Western").

The reason for the revocation was the failure of the bank to execute the federal laws regulating bank activities and regulations of the Bank of Russia.

According to the Bank of Russia, it was found that within the scope of supervision over the activity of the bank, it was revealed that the bank was providing inaccurate activity reports. The credit organization was conducting high-risk lending policies associated with the investment of funds in low-quality assets. Adequate assessment of the risks taken and accurate reflection of the value of the bank's assets leads to complete loss of its own funds (capital).

The "Western" bank has not fulfilled the requirement of the supervisory authority about the creation of necessary reserves for possible losses. The management and owners of the bank did not take measures to financially ameliorate the organization, the report says.

Following the news about the revocation of the license from "Western" bank, a dramatic story unfolded in the city of Belgorod, where a man, a client of the bank, came to the bank office with a gun demanding the bank should return his deposit to him. The man thus tried to return his savings worth 23 million rubles ($639,000).

The chief of the Interior Ministry in the Belgorod region, Viktor Pesterev, said that the man was going to close his account at the bank last week (he was saving the money in securities), but due to technical problems he could not receive anything. On Monday morning, the Central Bank published the news saying that the license from the bank had been withdrawn.

Against the background of such a development of the situation, the man lost control over himself and went to retrieve his savings with a gun in his hands. However, he did not use violence against anyone and agreed to lay down his weapon under the guarantee of return of the savings.

The official noted that the man did not hold anyone hostage in the bank office. However, law-enforcement authorities opened a criminal case of hostage-taking.

The desperate "invader" was keeping his savings in bills, which, unlike deposits, do not fall under the protection of the deposit insurance system. "A claim from a creditor, a natural person, based on securities (including bills), is satisfied in the third place," an official with the Deposit Insurance Agency said.

The bank promised that the man would receive his savings. It was also reported that the man could be relieved from criminal responsibility for his act.

Meanwhile, the Central Bank of the Russian Federation continues to clean the banking sphere from dysfunctional players. The regulator withdraws licenses from banks nearly every other week. Such measures are justified, but the question is that the measures hit bank clients in the first place.

The Central Bank of Russia started the "cleansing process" in the autumn of 2013. Dozens of banks have lost their licensed since that time. Today, the situation on the banking market is so unstable that the head of the Central Bank, Elvira Nabiullina, decided to toughen control over major banks, such as Gazprombank, Raiffeisenbank and Promsvyazbank to protect them from "sudden and unjustified movements."

As a result of the "cleansing," many bank clients turned to big players, such as Sberbank. Some other depositors, for the safety of their funds, decided to share the savings between several banks. In Russia, the state insures deposits of up to 700,000 rubles ($19,500).

The largest players that lost their licenses last year, in addition to Master-Bank, were Invest Bank and Pushkino Bank. The Deposit Insurance Agency thus had to pay to depositors 30.6 billion and 20.2 billion respectively. The clients of Master-Bank received 31.2 billion rubles from the agency.


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Author`s name Dmitry Sudakov