In accordance with the provisions of the 71 of the Banking Law, the Banking Regulation and Supervision Agency (BRSA) is entitled to revoke a non-performing bank’s license to operate, or to transfer such a bank’s shareholder rights except dividends to the Fund.
In case a bank’s license to operate is revoked, the management and control of that bank are transferred to the Fund in accordance with the provisions of article 106 of the Banking Law. The Fund verifies the insured deposits or insured participation funds in the bank and directly requests for the bankruptcy of the bank on behalf of its depositors. In case of an adjudication of bankruptcy about a bank, the Fund takes part in the bankruptcy’s estate in its capacity as a preferential creditor, and liquidates the bank as entrusted with powers and duties namely the bankruptcy’s estate, creditor’s meeting and an administration of bankruptcy.
In case a bank is transferred to the Fund along with its shareholder rights excluding dividends, management and control, in accordance with the provisions of article 107 of the Banking Law, the Fund is entitled to
• transfer its assets, organization, staff, insured deposit and participation funds to another bank, and
• take measures such as increasing the capital, depositing in the bank, and acquiring affiliates, real estates and other assets to reinforce and reorganize the bank’s financial structure (provided that they would not exceed the sum of the insured deposit or participation funds and that it owns the majority or the entirety of the shares), and transfer and sell the bank’shares,assets and liabilities, and merge the bank with another bank,
• directly request the BRSA to revoke the operating license of the bank. The Fund is required to stay in line with the principles to safeguard the reliability and stability of the financial system and make sure the process is cost-effective when exercising aforementioned powers.