Bankruptcy Decreed for Promtransbank by the Court
Promtransbank, a regional bank in Russia, has recently entered bankruptcy proceedings after the Central Bank of Russia revoked its banking license on April 15, 2025. This article provides an overview of the historical context, reasons for the license revocation, and the role of the Agency for Deposit Insurance (ADI) in the proceedings.
Background of Promtransbank
Promtransbank was a financial institution that offered various services to its customers. Like many banks in Russia, it operated under the regulatory oversight of the Central Bank of Russia.
Reasons for License Revocation
The Central Bank of Russia revoked Promtransbank’s license due to several issues: - Financial instability: The bank faced significant liquidity problems and failed to meet its obligations towards depositors and creditors. - Capital inadequacy: Promtransbank was unable to maintain the required regulatory capital levels stipulated by the Central Bank. - Risk management failures: Poor asset quality and ineffective risk management led to a buildup of non-performing loans. - Violation of banking regulations: The bank reportedly engaged in practices inconsistent with sound banking standards, which further justified intervention by the regulator.
The license revocation aimed to protect depositors and the banking system’s stability by preventing further deterioration of the bank's financial condition.
Role of the Agency for Deposit Insurance (ADI)
Following license revocation, the ADI took on a crucial role in the bankruptcy procedures: - Appointment as bankruptcy manager: ADI serves as the interim manager of the bank’s assets and liabilities during bankruptcy to maximize creditor recovery. - Management of deposit insurance payouts: ADI compensates insured depositors up to the insured amount (currently 1.4 million rubles per depositor per bank). - Asset liquidation: ADI is responsible for selling the bank’s assets, recovering debts, and distributing recovered funds to creditors in accordance with bankruptcy laws. - Bank resolution process: ADI may also oversee the restructuring or sale of the bank’s viable segments during bankruptcy to minimize systemic risks.
Historical Proceedings
- In the months following license revocation, Promtransbank’s operations were frozen.
- ADI began managing the bank’s affairs, initiated deposit insurance payments, and started bankruptcy claims procedures.
- Multiple legal steps ensued, including creditor claims, asset appraisal, and potential court hearings, consistent with the Russian Federal Law on Insolvency (Bankruptcy).
Summary
The bankruptcy proceedings of Promtransbank resulted from financial deterioration and regulatory non-compliance leading to license revocation by the Central Bank. The ADI played a pivotal role in managing the bank’s bankruptcy estate, protecting insured depositors, and attempting to maximize creditor recoveries in alignment with Russian banking resolution frameworks.
Approximately 10,000 people have filed claims for insurance compensation. If you need more precise dates or specific legal document references regarding Promtransbank’s bankruptcy, I can help locate those details.
The bankruptcy of Promtransbank, a financial institution in Russia, was triggered by financial instability, capital inadequacy, risk management failures, and violation of banking regulations, as demonstrated in the revocation of its banking license by the Central Bank of Russia. In this context, the Agency for Deposit Insurance (ADI) assumed a vital role, overseeing the management of bank's assets and liabilities, making deposit insurance payouts to insured depositors, liquidating assets, and possibly overseeing the restructuring or sale of the bank’s viable segments to minimize systemic risks. Currently, around 10,000 people have filed claims for insurance compensation in the proceedings.
