Three More Lenders Shut Down by Bank Of Russia

Three More Lenders Shut Down by Bank Of RussiaOn Friday, The Bank of Russia said it has revoked the licences of three more lenders, in a continued bid to its recent cleanup of the banking system. The three banks have combined assets of about 138 billion rubles ($4.2 billion). Suffering from flagging economic growth, Russia is trying to fasten down on the shadow economy and restrict capital flight by combating money laundering in the banking system which comprises of nearly thousand lenders.

This year almost 30 Russian banks have lost their licenses as the regulator desires to tighten oversight of the country's lenders, and harness the shadow banking activity.

The central bank said that Invest bank was guilty of false financial reporting and inadequate capital levels, while BPF was a threat to creditors because of its high risk borrowing. Investbank's offices temporarily suspended operations in Russia's westernmost region of Kaliningrad on Thursday after what the bank described in a statement as the "unfounded panic of depositors." BPF has had problems honouring obligations since November. Smolensk Bank has also had liquidity problems, and earlier this month requested financial assistance from the Central Bank.

Smolensk Bank had not observed its obligations to creditors and depositors while simultaneously "engaging in deals aimed at asset stripping," according to the Central Bank.