The Central Bank revoked the license of the credit institution Qiwi Bank

For the first time in a year and a half, the Central Bank revoked the license of a credit institution, one of the top hundred largest – Qiwi Bank. The bank played a prominent role in the payments market, including in cross-border settlements. Its most popular financial product was electronic wallets, the funds in which are not subject to the deposit insurance law. The peculiarity of this review is that as a result, clients of a number of other credit institutions who used Qiwi Bank payment services suffered.

Bank of Russia for the first time since August 2022 recalled banking license – from Qiwi Bank. The regulator explained that over the past 12 months it has “repeatedly applied supervisory measures to the credit institution,” and twice introduced “restrictions on certain operations.” According to the Central Bank, Qiwi Bank systematically violated AML/CFT legislation (anti-money laundering and countering the financing of terrorism).

The Central Bank says that the work of Qiwi Bank “was characterized by involvement in high-risk transactions aimed at ensuring settlements between individuals and shadow businesses, including transfers of funds in favor of crypto exchangers, illegal online casinos, bookmakers, etc., and also by searching for new ways to circumvent the restrictions imposed by the regulator.” The regulator claims that it has established “numerous cases of banks opening QIWI wallets using the personal data of individuals without their knowledge and carrying out transactions on them, which created significant risks for citizens.”

Only one instruction from the Central Bank to the bank over the past 12 months is widely known: from July 26, 2023 it limited a number of transactions and cash withdrawals. Then the general director of the QIWI group, Andrei Protopopov, emphasized that it was “in close dialogue” with the Central Bank. At the same time, QIWI denied rumors that arose in the market that Qiwi Bank’s license could be revoked.

However, the regulator had questions about Qiwi Bank before this. In December 2020 were introduced restrictions on making payments in favor of foreign trading companies and transfers to prepaid corporate cards. At the same time, a fine of 11 million rubles was imposed on the bank. But in March 2021, the company reported that the bank had corrected almost all of the identified violations: “As a result, it has allowed us to resume payments to some key foreign merchants and lifted some other restrictions introduced in December 2020.”

Preliminary insurance liability of the DIA in relation to Qiwi Bank, according to data at the beginning of 2024, is estimated at 4.6 billion rubles, payments will begin on March 6.

At the same time, the DIA clarified, “funds in QIWI wallets are electronic money and, according to the law “On Insurance of Deposits in Russian Banks,” are not subject to insurance.”

It is impossible to withdraw funds from wallets from the moment the license is revoked, lawyers say. As the Central Bank explained, requirements for the payment of funds from wallets will “be satisfied during the bankruptcy proceedings or forced liquidation of the bank through the collection and sale of assets and other property.”

The QIWI group assured that business not related to the activities of Qiwi Bank “operates as usual.” TASS announced the suspension of the operation of Qiwi Bank payment terminals in Moscow (at the beginning of 2023 there were more than 74 thousand of them), and Interfax — on the closure of bank offices in the regions.

Meanwhile, the revocation of Qiwi Bank’s license caused a cascade of problems in other financial institutions associated with its payment services. In particular, clients of the Tochka fintech service who were engaged in foreign economic activity through a branch of Qiwi Bank suffered. Now they cannot withdraw cash, make a transfer, exchange currency or pay with a card linked to an account at Qiwi Bank, Tochka Bank explained. In the mobile applications of Raiffeisenbank and Metallinvestbank, payment for mobile communications services and some providers of other services has become unavailable. “This is due to the revocation of the license of Qiwi Bank, through whose services payments for services of some companies were made,” explained Raiffeisenbank. All banks assured that the problems were temporary, without specifying the time frame for restoring services.

Partner at the Yukov and Partners Bar Association, Svetlana Tarnopolskaya, notes that Qiwi Bank can challenge the actions of the Central Bank, but in practice the court always sides with the regulator. From the moment the license is revoked, the bank’s management bodies (board) are suspended from work and are required to hand over all documentation to the temporary administration, in this case the DIA. If the bank’s assets are sufficient for settlements with creditors and a forced liquidation procedure is initiated rather than bankruptcy, the lawyer clarifies, the parent company and its other products (however, these are mainly fintech services directly related to the bank) will not be affected by subsidiary liability, and its business will likely not be affected.

Olga Sherunkova