Организационное становление системы страхования вкладов в России

Receivership of Insolvent Banks

With the passage and approval of the Federal Law of 20 August 2004 No. 121-F3 On Changes to the Federal Law On the Insolvency (Bankruptcy) of Credit Organizations and Recognizing the Annulment of Certain Legislative Acts (Points of Legislation) of the Russian Federation (further, the Law on Bank Bankruptcy), Russia has witnessed the creation of the institution of official receiver for insolvent banks, which function is to be performed by the Agency.

Given the special societal and economic significance of the banking system, the Agency replaces the individual entrepreneurs who served as arbitration trustees in the bankruptcy of those credit organizations that held licenses from the Bank of Russia to accept household deposits, as well as in the bankruptcy of credit organizations that are absentee debtors.

The Agency’s fulfilment of this role as bankruptcy trustee will ensure the transparency of settlements with creditors and minimize the expenses involved in liquidating de-licensed banks.

The Agency’s simultaneous performance of these two functions – deposit insurance and the liquidation of insolvent banks – is a necessary element of the process of creating a coherent system for defending the interests of the depositors and other creditors of Russian banks. This organizational unification of functions allows us to lower the potential losses of the deposit insurance system and to return from the bankruptcy estate to the mandatory deposit insurance fund as quickly and efficiently as possible the sum of money paid out to depositors. Combining these functions also allows us to create a single centre of responsibility for insolvent banks before their creditors, which will encourage increased trust both in the banking sector and in institutions of government.

The Agency’s activities in the field of bankruptcy trusteeship during 2004 followed three trajectories:
- creating a system for managing bankruptcy procedures and preparing the relevant regulatory base;
- preparing to perform the function of bankruptcy trustee from the moment a bank’s license is withdrawn until the opening of bankruptcy procedures; and
- direct performance of the function of bankruptcy trustee.

The technical foundation for the liquidation of banks was laid out in the Activity Concept of the State Deposit Insurance Agency Corp., following the mandate of the Federal Law on the Insolvency (Bankruptcy) of Credit Organizations, approved by the Agency’s Board of Directors (Protocol No. 8, 9 December 2004).

The system for managing bankruptcy procedures is based on the Agency’s internal rules, which determine the order of work at each stage of proceedings and are meant to ensure the observation of unified legal and operational discipline and standardized forms and methods for carrying out homogenous and periodically repeated activities that arise in the liquidation of banks.

As such, the Agency has developed templates for organizing bankruptcy procedures and documents setting out procedures for the preparation, approval and oversight of operating cost estimates for bankruptcy proceedings, the inventory of assets, the analysis of credit organizations’ financial standing, the determination of creditors’ demands, and the organization of settlements.

Within the framework of the automation of the Agency’s activities, a tender has been announced for the development of software to manage the register of creditors’ demands, the results of which were announced in February 2005.

In accordance with the Law on Bank Bankruptcy, the Agency carries out the functions of bankruptcy trustee through a representative, who is appointed from among the Agency’s staff.

A standard power of attorney document has been approved for the delegation by the Agency to its representative of the right to act in the Agency’s name. In addition to laying out the rights of the representative of the bankruptcy trustee, the document also limits the representative’s discretion in the disposal of the assets of the credit organization.

The volume and character of each representative’s remit is determined by the Agency, based on the situation at the credit organization to be liquidated and the necessity of minimizing risks connected to the performance of that remit. The Agency’s representative may fulfil his or her responsibilities simultaneously in several credit organizations undergoing liquidation and located in one or several neighbouring regions.

For the purposes of monitoring and oversight of bankruptcy proceedings, a procedure has been put in place for the preparation and distribution of information on bankruptcy proceedings to the Bank of Russia, the assembly (committee) of creditors, and to the court of arbitration. This document fulfils the requirement of the Federal Law on the Insolvency (Bankruptcy) of Credit Organizations regarding the strengthening of public oversight of the activities of the bankruptcy trustee. Thus, over the course of the bankruptcy proceedings the Agency must publish in the press no fewer than 11 updates on the progress of those proceedings and present to the court, to the creditors’ body and to the Bank of Russia a total of no fewer than 50 reports.

A necessary part of the Agency’s work as bankruptcy trustee is to uncover suspicious transactions involving the participation of the credit organization and infringing on the rights of its creditors, to investigate evidence of fictitious or intentional bankruptcy, and to bring participants (shareholders) of the bank to liability for their obligations to creditors vis-a-vis such violations.

To this end, the Agency has developed methodological recommendations for the investigation of suspicious transactions at credit organizations. The document, among other things, sets out the stages of uncovering suspicious transactions, instructions for investigating them, the economic content of suspicious transactions, and criteria for determining whether a transaction is suspicious.

The Agency believes this work to be of vital importance for the prevention of abuse in the bankruptcy of banks and for increasing trust in the banking system.

Working with assets is a core element of the Agency’s work in organizing the largest possible bankruptcy estate of credit organizations subject to liquidation. In accordance with approved procedures, work with the assets of credit organizations subject to liquidation is to be carried out under the principles of transparency and open access to information on the status of assets for all interested parties, while observing the rights and legal interests of creditors.

In the course of preparations for taking on the functions of bankruptcy trustee, the Agency’s representatives took part in the work of the temporary administration of credit organizations prior to the opening of bankruptcy proceedings. With the agreement of the Bank of Russia, the Agency’s staff were included in the temporary administrations of KB RFG-Bank, KB Vneshagrobank, KB Yarbank and AKB RNIB, with total estimated liabilities to creditors of 1.88 billion rubles.

On 23 December 2004, the Moscow Court of Arbitration for the first time appointed the Agency as bankruptcy trustee, in the case of OOO KB Style-Bank. Information to that affect was published by the Agency in Rossiiskaya Gazeta, the Bulletin of the Bank of Russia and the Bulletin of the Court of Arbitration. At the time bankruptcy proceedings began, the bank held 255 million rubles in currency, while creditor demands against those holdings totalled 182.4 million rubles.

During 2004, the property, valuables and documents of OOO KB Style-Bank have been transferred from the temporary administration to the Agency, and the bank’s archive and property have been relocated to new premises. Back-up copies of servers have been made, and a post office box has been rented for the receipt of correspondence. The relevant state and other authorities have been sent requests for information regarding any property rights, executive proceedings and arbitration or other court cases registered in relation to the debtor and its management.

		Receivership of Insolvent Banks With the passage and approval of the Federal Law of 20 August 2004 No. 121-F3 On Changes to the Federal Law On the Insolvency (Bankruptcy) of Credit Organizations and Recognizing the Annulment of Certain Legislative Acts (Points of Legislation) of the Russian Federation (further, the Law on Bank Bankruptcy), Russia has witnessed the creation of the institution of official receiver for insolvent banks, which function is to be performed by the Agency. Given the special societal and economic significance of the banking system, the Agency replaces the individual entrepreneurs who served as arbitration trustees in the bankruptcy of those credit organizations that held licenses from the Bank of Russia to accept household deposits, as well as in the bankruptcy of credit organizations that are absentee debtors. The Agency’s fulfilment of this role as bankruptcy trustee will ensure the transparency of settlements with creditors and minimize the expenses involved in liquidating de-licensed banks.


		The Agency’s simultaneous performance of these two functions – deposit insurance and the liquidation of insolvent banks – is a necessary element of the process of creating a coherent system for defending the interests of the depositors and other creditors of Russian banks. This organizational unification of functions allows us to lower the potential losses of the deposit insurance system and to return from the bankruptcy estate to the mandatory deposit insurance fund as quickly and efficiently as possible the sum of money paid out to depositors. Combining these functions also allows us to create a single centre of responsibility for insolvent banks before their creditors, which will encourage increased trust both in the banking sector and in institutions of government. The Agency’s activities in the field of bankruptcy trusteeship during 2004 followed three trajectories: - creating a system for managing bankruptcy procedures and preparing the relevant regulatory base; - preparing to perform the function of bankruptcy trustee from the moment a bank’s license is withdrawn until the opening of bankruptcy procedures; and - direct performance of the function of bankruptcy trustee. The technical foundation for the liquidation of banks was laid out in the Activity Concept of the State Deposit Insurance Agency Corp., following the mandate of the Federal Law on the Insolvency (Bankruptcy) of Credit Organizations, approved by the Agency’s Board of Directors (Protocol No. 8, 9 December 2004). The system for managing bankruptcy procedures is based on the Agency’s internal rules, which determine the order of work at each stage of proceedings and are meant to ensure the observation of unified legal and operational discipline and standardized forms and methods for carrying out homogenous and periodically repeated activities that arise in the liquidation of banks. As such, the Agency has developed templates for organizing bankruptcy procedures and documents setting out procedures for the preparation, approval and oversight of operating cost estimates for bankruptcy proceedings, the inventory of assets, the analysis of credit organizations’ financial standing, the determination of creditors’ demands, and the organization of settlements. Within the framework of the automation of the Agency’s activities, a tender has been announced for the development of software to manage the register of creditors’ demands, the results of which were announced in February 2005. In accordance with the Law on Bank Bankruptcy, the Agency carries out the functions of bankruptcy trustee through a representative, who is appointed from among the Agency’s staff. A standard power of attorney document has been approved for the delegation by the Agency to its representative of the right to act in the Agency’s name. In addition to laying out the rights of the representative of the bankruptcy trustee, the document also limits the representative’s discretion in the disposal of the assets of the credit organization.


		The volume and character of each representative’s remit is determined by the Agency, based on the situation at the credit organization to be liquidated and the necessity of minimizing risks connected to the performance of that remit. The Agency’s representative may fulfil his or her responsibilities simultaneously in several credit organizations undergoing liquidation and located in one or several neighbouring regions. For the purposes of monitoring and oversight of bankruptcy proceedings, a procedure has been put in place for the preparation and distribution of information on bankruptcy proceedings to the Bank of Russia, the assembly (committee) of creditors, and to the court of arbitration. This document fulfils the requirement of the Federal Law on the Insolvency (Bankruptcy) of Credit Organizations regarding the strengthening of public oversight of the activities of the bankruptcy trustee. Thus, over the course of the bankruptcy proceedings the Agency must publish in the press no fewer than 11 updates on the progress of those proceedings and present to the court, to the creditors’ body and to the Bank of Russia a total of no fewer than 50 reports. A necessary part of the Agency’s work as bankruptcy trustee is to uncover suspicious transactions involving the participation of the credit organization and infringing on the rights of its creditors, to investigate evidence of fictitious or intentional bankruptcy, and to bring participants (shareholders) of the bank to liability for their obligations to creditors vis-a-vis such violations.


		To this end, the Agency has developed methodological recommendations for the investigation of suspicious transactions at credit organizations. The document, among other things, sets out the stages of uncovering suspicious transactions, instructions for investigating them, the economic content of suspicious transactions, and criteria for determining whether a transaction is suspicious. The Agency believes this work to be of vital importance for the prevention of abuse in the bankruptcy of banks and for increasing trust in the banking system. Working with assets is a core element of the Agency’s work in organizing the largest possible bankruptcy estate of credit organizations subject to liquidation. In accordance with approved procedures, work with the assets of credit organizations subject to liquidation is to be carried out under the principles of transparency and open access to information on the status of assets for all interested parties, while observing the rights and legal interests of creditors. In the course of preparations for taking on the functions of bankruptcy trustee, the Agency’s representatives took part in the work of the temporary administration of credit organizations prior to the opening of bankruptcy proceedings. With the agreement of the Bank of Russia, the Agency’s staff were included in the temporary administrations of KB RFG-Bank, KB Vneshagrobank, KB Yarbank and AKB RNIB, with total estimated liabilities to creditors of 1.88 billion rubles. On 23 December 2004, the Moscow Court of Arbitration for the first time appointed the Agency as bankruptcy trustee, in the case of OOO KB Style-Bank. Information to that affect was published by the Agency in Rossiiskaya Gazeta, the Bulletin of the Bank of Russia and the Bulletin of the Court of Arbitration. At the time bankruptcy proceedings began, the bank held 255 million rubles in currency, while creditor demands against those holdings totalled 182.4 million rubles. During 2004, the property, valuables and documents of OOO KB Style-Bank have been transferred from the temporary administration to the Agency, and the bank’s archive and property have been relocated to new premises. Back-up copies of servers have been made, and a post office box has been rented for the receipt of correspondence. The relevant state and other authorities have been sent requests for information regarding any property rights, executive proceedings and arbitration or other court cases registered in relation to the debtor and its management.