Bulgaria's fourth-biggest bank has been stripped of its licence and will face insolvency proceedings, the central bank said Thursday, five months after accounts were frozen following a run. "The BNB has revoked the banking licence of Corporate Commercial Bank (CCB)," the central bank said in a statement. "In accordance with banking insolvency law, a request has been addressed to the relevant court to open insolvency proceedings."
The bank has been shut and under special central bank administration since late June when press reports about alleged irregularities prompted a run by distressed depositors. The crisis had left frozen the savings of thousands of depositors, businesses and local authorities in CCB, prompting protests and threats of legal action.
The central bank decision will now open the way for the payment of guaranteed deposits of up to 196,000 leva (100,000 euros, $125,000) within 20 days. The run sparked fears of a repeat of 1996-7 when 14 Bulgarian banks went bankrupt and put the spotlight on behind-the-scenes oligarch turf wars and poor banking supervision in the EU's poorest country.
The CCB's largest shareholder, Tsvetan Vasilev, who went into hiding immediately after the run, was subsequently arrested in Belgrade and charged with embezzlement. He denied any wrongdoing, accusing a business opponent of masterminding the attack against the bank. The central bank said Thursday its decision followed an audit of CCB's third-quarter accounts which showed that its total assets were in negative territory to the tune of 3.7 billion leva. The government had initially considered rescuing the bank but dropped all plans after auditors said that the CCB would have to write off as much as 4.2 billion leva.
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