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(Adds bank owner's comment, other details)
PRAGUE, Oct 11 (Reuters) - The Czech central bank said ERB, a small Russian-owned bank operating in the Czech market, had failed to meet obligations and depositors could claim compensation for losses from the national deposit insurance scheme.
ERB, which is 93 percent owned by Russian businessman Roman Popov and focuses on business with Russia, could no longer meet its obligations to depositors, the central bank said on Tuesday.
Popov said that he was trying to improve the situation of the bank, but the central bank's step had blocked his effort.
"It is an artificially created bankruptcy. I am shocked by what has happened," he told Czech Hospodarske Noviny daily paper, adding the bank had enough resources and it was working to meet requests of the regulator.
The central bank declined to comment further.
One of the smallest players in the Czech market, with assets of 4.97 billion crowns ($206.23 million) at the end of June, ERB has been banned by the central bank from taking deposits and providing loans since March.
The central bank announcement triggers payments to depositors from the country's compulsory deposit insurance scheme, which fully guarantees deposits of up to 100,000 euros.
The national deposit guarantee scheme said it expected to pay out about 3.6 billion crowns in compensation.
The Czech banking system as a whole has maintained profitability and required no bailouts during and since the global financial crisis, and ERB's failure does not point to any wider systemic problems.
Regulatory filings showed ERB bank had total loans of 1.78 billion crowns at the end of the second quarter, of which 940 million crowns - more than 50 percent - were in some type of default. That included 649 million crowns' worth of loans booked as loss, the worst credit quality category.
The bank reported return on average tier 1 capital of -53.68 percent and a loss of 120 million crowns at the end of the second quarter. ($1 = 24.0990 Czech crowns) (Reporting by Jan Lopatka; Additional reporting by Petra Vodstrcilova; Editing by Catherine Evans)