A client of a bank which lost its license took three people hostage in western Russia in an attempt to make the bank give him his money back. The situation was resolved peacefully after negotiations with the police.

The incident happened at a branch of the Zapadny bank in Belgorod, a city in western Russia in a region bordering Ukraine. Following several hours of negotiations, the hostage-taker agreed to release the hostages and surrender his weapon, police reported.

“The operation is over. The man peacefully surrendered the weapon in exchange for guarantees of his deposit being given back [to his family],” Belgorod region police chief General Viktor Pesterev said in a statement.

The general added that the man was acting out of desperation caused by his failure to withdraw his money shortly before the bank lost its license. The authorities may not prosecute him for the serious crime of hostage-taking, considering the circumstances, he said.

The armed man went into the bank on Monday morning and demanded a certain sum of money, police said earlier. Media said the man was armed with a Saiga hunting carbine and was demanding a ransom of 25 million rubles ($700,000).

Police evacuated a school and a kindergarten near the branch as a precaution.

The incident came on the day when the Russian central bank announced the revocation of Zapadny bank’s banking license. The bank had cooked its books and failed to comply with regulations on the amount of assets a financial organization must maintain to ensure its stability, the central bank said.

The withdrawal of the license means that the bank’s clients will have to wait for some time before they can get their deposits. Only deposits no bigger than about $20,000 will be reimbursed by the Russian national bank deposit insurance agency. Creditors holding larger debts will have to wait for the bank’s likely bankruptcy.

Life News tabloid said it had identified the hostage taker as 46-year-old Aleksandr Vdovin, a client who holds the bank’s promissory notes for a large sum, and who decided to reimburse them at gunpoint. The report added that the hostages were the branch manager, a cashier and a janitor.

LifeNews earlier spoke to a friend of the alleged hostage taker, Gennady Vechorka, who said his holding up of the bank branch was most likely an act of desperation. He said Vdovin, a father of two, is a rational man and would release the hostages unharmed, if he is given some time to cool down and think straight.

Vechorka said part of the money the bank owes Vdovin is not his own and that the man was concerned that he would not be able to pay it back, if the bank failed. So he took a drastic step to protect his family.

The tabloid spoke to Vdovin himself on the phone. He sounded rather calm and said he was about to settle his differences with the bank. He said he tried to withdraw his deposits in a proper way two days ago, but was denied. He also agreed to allow his friend, into the bank to act as a negotiator.

Vladimir Semago, chair of the Zapadny board of directors, blamed Russia’s central bank and its move to revoke the license for the hostage situation, saying the decision was rushed and unwise.