December 13, 2013 / 8:15 AM / 5 years ago

Russian central bank closes three more banks in crackdown

MOSCOW (Reuters) - Russia’s central bank said on Friday it had withdrawn the licenses of three more banks in a crackdown on shady financial activities a day after President Vladimir Putin renewed a drive to stem capital flight.

An exterior view shows the headquarters of the Central Bank in Moscow, September 13, 2013. REUTERS/Maxim Shemetov

The closures of the three banks, the biggest of which was Investbank - ranked 79th in Russia by assets - were linked to mounting payment problems and dubious operations, it said.

The closures come weeks after the central bank withdrew the license of Master Bank, a mid-sized Moscow bank, in the most potent demonstration that Governor Elvira Nabiullina is serious about halting rampant fraud and money laundering in Russia.

Dodgy banks are the conduit for illegal capital outflows that Nabiullina’s predecessor estimated at $50 billion last year.

Even so, Putin said on Thursday that “nothing has been done” to implement an initiative he launched a year ago to stem capital flight that has sapped both investment and the Kremlin’s coffers.

Continuing closures have highlighted counter-party risks among Russia’s 900 banks, adding to negative sentiment on financial markets. The rouble fell to four-year lows following the latest closures.

The central bank has stripped around 30 banks of licenses since Nabiullina took the helm at the central bank in June.

The license withdrawals of Investbank, Smolensky bank (125th) and Project Finance Bank (129th) - their combined assets are 67 billion roubles ($2 billion), according to Interfax - did not come as a surprise.

All the three have had experienced recent payment problems with depositors and creditors, the central bank said in three separate statements.

Separately, the Russian central bank will hold a policy meeting on interest rates on Friday.

($1 = 32.7602 Russian roubles)

Reporting by Maya Nikolaeva; Additional reporting by Oksana Kobzeva; Editing by Douglas Busvine and Alister Doyle

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