According to a report by the International Business Times, The central bank of Russia had pulled back the license of Moscow-based Master Bank. The central bank reasoned that the said bank, favored by President Vladimir Putin, was deemed to have been performing dubious operations on a larger scale. Master Bank's license loss indicated the start of the Russian central bank's crackdown on financial institutions in the country.

Although Master Bank ranked number 41 in terms of assets and only holds USD1 billion in individual deposits, the bank is one of the top five ATM operators and plastic card issuers. One of the members of Master Bank's board is a cousin of Putin.

Upon Elvira Nabiullina's takeover of the Russian central bank in July as the country's first female governor, the shutdown of Master Bank would be the central bank's top high-profile move yet. This week, Nabiullina said Master Bank was found to be involved in illegal activities and that it has a negative capital of around USD61 million.

On Wednesday at the country's lower house of parliament called the Duma, Nabiullina explained the central bank's decision to shut Master Bank down. Nabiullina said, "The bank concealed its real condition, submitting substantially false reports. The bank was involved in servicing the shadow sector of the economy, illegal transactions and repeated violations of money-laundering laws. We were forced to take this as last-resort measure."

According to news outfits Bloomberg and the Wall Street Journal, Russian police had been investigating Master Bank since last year. Citing a post by Livejournal blogger dr_crisis who wrote in March, the post read, "Hundreds of Master Bank's armored trucks full of black market cash drive around Moscow ... Every morning there is a line of people at the bank's office on Pyatnitskaya with sacks for cash, and all this is happening in Moscow's plain sight."

Bankers who sided with the blogger deduced that the Russian government allowed Master Bank to open despite claims of dubious operation due largely to the bank's ties with Putin. A spokesman from the Kremlin had told the media reporters that other than the name, Putin has no ties to the cousin.