2 Banks Fall to Liquidity Constraints

The Central Bank said Friday that it had taken away the banking license of midsized Lefco and put the Deposit Insurance Agency in charge of Electronica bank.

Lefco had its license revoked for "not fulfilling federal laws that govern banking activity, as well as Central Bank rules" and "the inability to meet creditors' demands," the Central Bank said. It also said Electronica had inadequate liquidity to meet its depositors' and creditors' demands.

Both banks are ranked among Russia's largest 200 lenders.

The Deposit Insurance Agency's functions were expanded in October to provide support to failing banks. The financial crisis and credit crunch have dried up liquidity and created general mistrust among the country's roughly 1,200 banks, most of which are tiny.

Authorities have changed the deposit insurance rules, and now the first 700,000 rubles ($25,600) of a deposit are guaranteed.