Central Bank called the main methods of fraud “Potemkin banks”


To complete the clearing of the Russian banking sector from unfair players “Potemkin banks” is scheduled for 2019, by this time in the country may remain nearly 400 banks, said in an interview with Reuters, the Deputy head of the Central Bank Vasily Pozdyshev.

However, the struggle for the recovery of the banking sector, according to the Chairman of the Bank of Russia, is difficult, as the Bank has not only to check whether adequate capitalization of a Bank, as usual for regulators, but also to act as an investigator for financial crimes.

Most often, the Central Bank, according to Pozdyshev, faced with the withdrawal of funds from the banks under the credit “impossible borrowers,” which have turned to fraud as a separate business. While at first glance such borrowers are quite conscientious companies and from time to time even pay taxes, which seriously hampers the detection of fraud.

“We have to go at each borrower. We enter the offices, we need computers… We have to go to the warehouse to see if leads trading activity the borrower or not, whether he that is in stock. No regulator in the world doesn’t do that work,” said Pozdyshev.

According to the Chairman of the Central Bank, the scammers are also actively using the scheme with a massive fictitious loans to individuals. To do this, they buy the base retail borrowers of other banks and draw on real people and fictitious loans in order to disguise served, so this pyramid can easily survive for several years.

As actively frauds with fictitious deposits. Real depositors of the Bank with this, but from falsified financial statements show that the money received from them and immediately after that was issued in the form of loans.

“It is a criminal type offense, it is used when the Bank realizes that he is likely to withdraw, consciously goes for it to obtain compensation from the Deposit insurance Fund”, — said Pozdyshev.

In addition, banks, in his words, often without the knowledge of customers withdraw money from their deposits. A special program generates a false statement about the release of the funds.

“Thus, the Bank itself begins to control the deposits and creates a virtual reality, as if these investors took the money and shows us in reporting. Further, these funds are used by the Bank: sometimes it is designed in the form of contracts that the client actually did not sign, and sometimes not decorated,” — said the Chairman of the Central Bank.

Unscrupulous schemes used by some banks and placement of funds on correspondent accounts with foreign counterparties. Derived money abroad are allegedly affiliated to one or other encumbrance, which subsequently creates obstacles to their return requirement imposed in the Bank temporary administration.

“In some cases we are dealing with outright fraud. It’s one thing when the Bank is burdened, the other when the Bank has a program that calculates these funds adds a few zeros and issue reporting. There have been cases of fake SWIFT messages that the Bank we were given,” — said Pozdyshev.

He also noted that the Central Bank is still faced with the cases when the problem the banks have is not due to fraud, and in selecting the leadership of the wrong strategy or economic failures.

In early 2016, Alexei Simanovsky, who was then a post of the first Deputy Chairman of the Central Bank, predicted that the bulk of the work on clearing the banking sector of Russia will be completed in 2017.

“I think within a couple years we can handle it, most of the work done in 2014, 2015 will do in 2016, probably, something will be left for 2017,” — said Simanovsky, noting that the number of reviews of licenses will soon be reduced to isolated cases.

At the same time, the head of the Bank of Russia Elvira Nabiullina, speaking in October 2016 at the forum “Russia calling!”, promised that financially unstable banks will remove from the market without any “quantitative restrictions”.

“We are taking and will continue to withdraw from the market those banks with chronically unstable condition, the owners are not able to cope with the situation. This policy will continue,” — said Nabiullina.

About the need to rid the banking sector of unreliable and inefficient financial institutions in the same forum said the President of Russia Vladimir Putin, according to which “fault” of the Central Bank consists only in the fact that stringent measures began to be applied early.

“We had timely to make these decisions before. But better late than never,” said the President.

The policy of the Central Bank the head of state was supported at the annual “big press conference”, indicating that there is no one who would consider the actions of the Central Bank to improve the financial system of the country by mistake. “There is simply no” — said the President.

Source