The HNB Council made the decision after it was determined that Centar Banka was not recapitalised in line with a decision by the shareholders' assembly on August 16 HNB, whereby the bank failed to execute HNB decisions.

The additional capital that was to have been injected by the Czech J&T bank, along with vital changes to the management of the bank, and its loan and other business risks, was a vital precondition for establishing legitimacy and ensuring the continuation of the bank's operations, a statement by HNB says.

The HNB on Monday gave its consent to J&T to acquire a qualified share of more than 50% of Centar Banka's equity, under the condition that J&T injects fresh capital as determined by the Centar Banka's shareholders' assembly.

J&T, however, withdrew its claim to acquire stock in Centar Banka on the same day, which means that attempts to stabilise the bank's business have failed and as such bankruptcy proceedings have been proposed, HNB's statement says.

The HNB has decided to appoint a special management in the bank until the court decides on bankruptcy proceedings, which means that all payments from the bank's accounts are banned, the statement says.

Consequently, that means that the bank's clients cannot withdraw money from their accounts until the court makes its decision, while the bank's debtors are obliged to continue making payments to the bank.

Secured deposits will be made available to account holders within the legally prescribed period, the HNB notes.