The central bank of Russia has decided to withdraw the licence of Russian mid-sized lender Probusinessbank for failing to comply with minimum capital requirements, according to Reuters.

According to the central bank, the capital gap was created as Probusinessbank "carried out a high-risk policy connected with placing its monetary means in low-quality assets."

The central bank deputy chairman Mikhail Surkov said that the Russian lender’s liabilities exceeded its assets by at least RUB67bn ($1.04bn).

"The hole was caused by the presence at the bank of various financial assets that had signs of being fictitious," Surkov was quoted as saying by the news agency.

As per the second-quarter accounts, Probusinessbank managed about RUB27bn ($420m) in retail accounts and deposits.

The cancellation of Probusinessbank’s license comes in the face of an economic contraction in Russia created due to low oil prices and Western sanctions over the Ukraine crisis, in turn resulting in deterioration in banks’ assets.