"Following the European Central Bank (ECB) had assessed that JSC PNB Banka was failing or likely to fail and the decision by the European Single Resolution Board that resolution action was not necessary in the public interest, the Financial and Capital Market Commission has prepared an application to the court for the opening of insolvency proceedings," an official statement said.
The application was submitted 22 August, to the City of Riga Vidzeme District, at the same time asking for the appointment of Vigo Krastiņš as insolvency administrator of the bank.
At the same time the regulator underlined the reasons why the bank was canned, saying:
"The bank supervisors, the ECB and FKTK, have repeatedly applied to JSC “PNB Banka” supervisory measures for the purpose that the bank would meet regulatory requirements, as well as granted the bank an opportunity to carry out capital strengthening measures within the specified deadlines, but the bank was unable to meet the set limits and deadlines. All the information submitted so far has been evaluated and has not provided assurance to FKTK that the set supervisory measures would be complied [with]."
If and when the measure is granted by the court, PNB will join another bank, ABLV, in administration, though the model used for the "voluntary liquidation" of ABLV's assets is likely to be different to the one in PNB's case.
However the regulator did say it would "assess the vision for managing the bank's insolvency proceedings proposed by applicants, existing experience and available resources, in addition assessing their understanding of the issues related to the prevention of money laundering and terrorism financing, as well as the information received from the law enforcement authorities."
Meanwhile, August 22 is also the date upon which depositors in PNB banka will start to have their money returned to them after the bank's operations were suspended a week ago. Anyone in search of more information about claiming their money is advised to visit the FKTK website.