Depositors at Russia's Renaissance Credit were rattled on December 14 after the central bank revoked the license of the similarly-named Renaissance Bank.
Renaissance Credit, which is controlled by Russian billionaire oligarch Mikhail Prokhorov, was hit by "floods" of worried depositors in St Petersburg, according to a report by Rosbalt news agency.
However, Alexey Levchenko, chief executive of Renaissance Credit, was dismissive of such reports and any confusion with Renaissance Bank's woes.
"I don't know for whom it's a confusion," Levchenko told bne IntelliNews. "We had not a lot of calls and positive inflow of deposits today so it's a non-issue."
In a December 14 statement on its website, Renaissance Credit said it continues to operate in its "normal mode" and called on its customers "to remain calm and not to succumb to unrest".
The reaction of some depositors indicates how shot the confidence is in Russia's banking sector following the collapse in the ruble, the shock hike in interest rates last December and the surging level of bad loans.
The Central Bank of Russia (CBR) revoked the license of three more lenders, including Moscow-based Renaissance Bank, on December 14 as part of its clean-up of the financial sector. Renaissance was accused of involvement in "high-risk lending" as well as the "questionable" transfer of funds in large quantities overseas.
Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending practises and the financing of rackets and even terrorism.
Almost 100 lenders have had their licenses revoked so far this year at a rate of over two a day. The overall number has declined to 696, a far cry from the total of 1,094 in January 2013 when Elvira Nabiullina was appointed to take over as governor of the Central Bank of Russia (CBR) from the long-serving Sergei Ignatiev.
In addition, 78 lenders are currently limited from taking public funds as deposits, according to the CBR's first deputy chairman Mikhail Sukhov. He said a further 151 institutions are providing the regulator with reports on a daily basis.
Herman Gref, chief executive of Russia’s largest lender Sberbank, said on December 9 he expects about 10% of Russian banks will lose their licenses in 2016. Yet Central Bank chief Elvira Nabiullina insists the banking sector is not in crisis mode and is simply going through a difficult time.
"There is no crisis in the Russian banking system," she said in a Moscow press conference on December 11, refuting earlier remaks by Gref that the sector was in the throes of a major crisis. "The banking system just like the economy in general is going through hard times, but it has showed an ability to quickly adjust to the current conditions. It is important that the banks began to choose borrowers carefully, this is important for boosting our economy."
Standard & Poors said on December 14 that Russian banks need RUB850bn ($12bn) for a further capitalisation of the banking system, which it said is facing its biggest challenge in a decade.
Meanwhile, the CBR will increase the credit line available to the state Deposit Insurance Agency (DIA) by RUB140bn ($2bn), the agency said in a statement on December 14.
The regulator's current credit limit for DIA is RUB110bn, and the expansion will more than double funds available for compensating guaranteed deposits for failed banks and banks that had their licenses revoked.