The Corporate Commercial Bank (KTB) did not fail, because the central bank intervened quickly and decisively, BNB Governor Ivan Iskrov explained.

Bulgarian National Bank (BNB)'s Governing Council held a press conference just an hour after the central bank announced it had placed KTB under special supervision upon the commercial bank's request.

It decided to do so after KTB sent a letter asking for the step, due to “exhaustion of liquidity and termination of all payments and banking operations”.

With its move, as of June 20, 2014 BNB revokes the rights of KTB shareholders and appoints a supervisory board.

In the Governing Gouncil's statement to the media delivered at the press conference, Iskrov reminded that KTB was “among the banks with the highest liquidity" before a "rumor" involving a BNB Deputy Governor and his alleged dependency on "a certain bank" (implying the role of KTB) was spread by an anonymous e-mail sent from a purported central bank employee to the media.

The rumor coincided with the start of pre-trial proceedings against BNB Deputy Governor Tsvetan Gounev.

It also led to the withdrawal of "huge amounts of ready money" and prevented the bank from delivering on its liabilities, the BNB Governor explained

In the statement Iskrov presented the Governing Council's decision, under which BNB places KTB under supervision for a period of three months.

The bank is to freeze any operations within that stretch of time and is forbidden to perform any activity.

As a result clients of the bank would have it difficult to be provided any services.

A Supervisory Board of two members, Hristina Stanova and Slavyana Danailova, has been appointed.

BNB also temporarily dismisses KTB's four Governing Council members and four Supervisory Board members and transfers their competencies to its own two-strong board.

Voting rights of shareholders controlling more than 10% of KTB assets - namely Bromak Invest (owned by Tsvetan Vasilev) and Bulgarian Acquisition Company Luxembourg - are also being suspended for three months.

The BNB Supervisory Board is now virtually KTB's governing body, with "huge competencies" and in charge of safeguarding the bank's exclusion from the Bulgarian payment system.

The Board is also to conduct an assessment of the bank so that talks could be held with shareholders "and other potential buyers".

"Conversations with the shareholder having expressed interest - that is VTB - are starting immediately. They can end in a day, a week or a month, when the interest has been confirmed by shareholders and they provide the respective support," Iskrov explained.

The Russian bank VTB, has some 9.9% of KTB assets, has shown interest in talks with the central bank, in a move to support the commercial institution.

"Services and operations of the bank will be restored [when the bank has its support], until then [customers] have to wait."

BNB has to know "who will take charge of the bank when it opens again, that's our purpose," Iskrov elaborated.

Iskrov stressed that the media must urge tranquility among Bulgarians, as the developments at KTB, Bulgaria's fourth-largest bank, could not affect other commercial banks by any means.

He also made clear that there was no relation between the drop in liquidity and the currency board.

KTB clients were lining up in front of the KTB central office in Sofia shortly after noon on Friday.

A man, who wished to remain anonymous, told Novinite.com he was waiting because he has business with the bank, but not to withdraw his deposits.

"I am trying to get some work done – I have transactions to do and this is why I am here", he said. "I went to the nearest KTB branch and they told me there is no electricity. In the second they said they had orders not to work today. I didn't know the BNB placed KTB under supervision and perhaps it is the right thing to do. But a representative of KTB should have come out in front of us and said “Please, remain clam, there is nothing to worry about”. I've been waiting here for an hour and a half and nothing much happens. Initially people were going in and out of the bank, but not in the past hour."