Central Bank Withdraws Master Bank’s Licence
News: On November 20 2013, the Russian central bank announced that it has withdrawn the licence of Moscow-based Master Bank over the failure by the bank to comply with anti-money laundering laws, false accounting and granting loans to connected parties. The move is believed to be a stance by the new governor Elvira Nabiullina about tightening banking sector regulations in the country. The withdrawal of the licence will likely cost the state's Deposit Insurance Agency around RUB30bn (US$917mn), reports Reuters, citing the agency's deputy head Andrei Melnikov.
BMI View: Russia's banking sector is poised for a modest cyclical upturn in 2014 on the back of a central bank's move to ease monetary conditions. However, beyond 2014 the banking sector will experience a structural decline in the pace of credit and asset growth, as lack of economic and sector-level reform will weigh on its growth prospects for the foreseeable future.