LAW OF UKRAINE On Banks and Banking

Part I. General Provisions
Chapter 1. General Provisions

Article 1. Subject and Purpose of the Law

This Law defines the structure of the banking system, economic, organizational and legal guidelines for creation, operation, reorganization and liquidation of banks.

The purpose of this Law is to provide legal support to a stable development and operation of banks in Ukraine in order to create an appropriate competitive environment in the financial market, protect legitimate interests of bank depositors and clients, introduce favorable conditions for the development of the economy of Ukraine, and support domestic commodity producers.

Article 2. Definition of Terms

Terms used in this Law shall have the following meaning:

  • “Underwriting” means purchase of securities on the primary market followed by their further resale to investors; concluding an agreement to guarantee a full or partial sale of issuer’s securities to investors, their full or partial redemption at a fixed price with subsequent resale, or obligating the buyer to do everything in his power to sell as many securities as possible without assuming the obligation to purchase any of the unsold securities.
  • “Affiliate of a bank” means any legal entity in which the bank holds an essential participation or which holds an essential participation in the bank.
  • “Bank” means a legal entity, which has an exclusive right, under the National Bank of Ukraine license, to perform the following general banking operations in aggregate: attraction of deposits and funds belonging to households and legal entities, allocation of these funds on its own behalf, terms and at its own risk, and opening and servicing accounts of individuals and legal entities.
  • “Bank with foreign capital” means a bank where the share of capital, owned by at least one non-resident, exceeds 10 percent.
  • “Banking activity” means deposit-attraction activity in respect of the funds of individuals and legal entities and allocation of these funds on the bank’s own behalf, terms, and at its own risk, opening and servicing accounts of individuals and legal entities.
  • “Bank credit” means any obligation of a bank to extend a certain amount, any guarantee, any obligation to acquire the right to claim debt, or any extension of the debt maturity, which occurs in exchange for the borrower’s commitment to repay the debt amount, as well as an obligation to pay interest and other charges due on this amount.
  • “Banking license” means a document issued by the National Bank of Ukraine pursuant to the procedure and subject to terms specified in the present Law, and on the basis of which a bank has the right to banking activity.
  • “Banking payment instrument” means an instrument containing details identifying its issuer, the payment system, in which it is used and, as a rule, its holder. Relevant documents are formed with the help of banking payment instruments for transactions performed using banking payment instruments, on the basis of which funds are transferred or other services rendered to holders of such instruments.
  • “Bank accounts” mean accounts which show a bank’s own funds, claims, commitments of a bank in relation to its clients and counteragents, and which allow transfer of funds by using banking payment instruments.
  • “State Register of Banks” means a register maintained by the National Bank of Ukraine that contains information on state registration of all banks.
  • “Deposit” means funds in cash or a non-cash form in the currency of Ukraine or foreign currency that are placed by clients on their personal accounts with a bank according to an agreement for a specified period of time or without the specification of such a period of time, and that are subject to repayment to a depositor under the legislation of Ukraine and terms of the agreement.
  • “State registration of a bank” means granting a bank the legal entity status in accordance with requirements of Chapter 3 of the present Law.
  • “Business reputation” means the aggregate confirmed information about a person that makes it possible to draw a conclusion about his/her professional and managerial skills, integrity and compliance of his/her activities to law.
  • “Economic norms” mean indicators, established by the National Bank of Ukraine, compliance with which is mandatory for banks.
  • “Foreign” refers to a citizen or a legal entity of any country other than Ukraine.
  • “Essential participation” means direct, indirect, independent or joint holding of 10 or more percent of the statutory capital or the voting right granted by purchased shares (stakes) of a legal entity or the ability to exert decisive influence on management or activities of a legal entity irrespective of formal ownership.
  • “Capital of a bank” means a residual value of bank assets after deduction of all its liabilities.
  • “Subscribed capital” means the amount of capital for which written commitments were received from bank stakeholders (shareholders) to contribute funds in accordance with shares (stakes) subscription.
  • “Statutory capital” means paid-in and registered subscribed capital.
  • “Regulatory capital (own funds)” is made up of the main and additional capital, weighted for risks, determined by regulations of the National Bank of Ukraine.
  • “Client of a bank” means any individual or legal entity who uses services of a bank.
  • “Control” means direct or indirect, individual or joint holding of a share in a legal entity which is equivalent to 50 or more percent of the statutory capital or votes of a legal entity, or a possibility to exert a decisive influence on management or activities of a legal entity pursuant to an agreement or through any other means.
  • “Funds” mean money in the national or a foreign currency or its equivalent.
  • “Bank’s creditor” means a legal entity or an individual who has a written confirmation of a claim to the borrower as to latter’s property obligations.
  • “Liquidation of a bank” means a procedure for terminating the functioning of a bank as a legal entity pursuant to the provisions of the present Law.
  • “Liquidator” means a legal entity or an individual, who performs functions as to the termination of a bank’s activity and satisfaction of creditor claims.
  • “Liquidation mass” means all types of property assets (property and property ownership rights) of a bank, which it owns as of the day when the liquidation procedure was initiated, as well as those revealed during the liquidation process.
  • “Moratorium” means the suspension of the bank’s fulfillment of property obligations and obligations to pay taxes and charges (mandatory payments), the maturity of which fell due prior to the introduction of the moratorium, as well as the suspension of actions aimed at ensuring the fulfillment of these commitments and obligations to pay taxes and charges (mandatory payments), introduced prior to the adoption of a decision on imposing the moratorium.
  • “Bank insolvency” means the inability of a bank to satisfy legal claims of creditors on time and in full due to the absence of funds or a decrease in the size of capital to the amount equal to less than one-third of the minimum size of the regulatory capital of a bank.
  • “Regulations of the National Bank of Ukraine” mean regulations issued by the National Bank of Ukraine within its powers for enforcing this and other laws of Ukraine.
  • “Bank subdivision” means a structural unit of a bank, which does not have the status of a legal entity and which executes functions, defined by a bank.
  • “Representative office of a bank” means a separate territorial structural subdivision of a bank which does not perform banking activities.
  • “Reorganization of a bank” means merger, takeover, spin-off or break-up of a bank, transformation of its organizational and legal form resulting in the transfer, assumption of its property, funds, rights and liabilities by legal successors.
  • “Banking settlement operations” mean the movement of funds on bank accounts that is performed pursuant to client instructions or as a result of actions, which have led to the legal transfer of assets ownership rights within the scope of law.
  • “Affiliated party” means a legal entity with holders of essential participation owned jointly with a bank.
  • “Systemic bank” means a bank with liabilities equal to at least 10 percent of total liabilities of the banking system.
  • “Provisional administration” means a procedure applied by the National Bank of Ukraine in the course of bank supervision under the circumstances stipulated by the present Law.
  • “Provisional administrator” means an individual or a legal entity, appointed by the National Bank of Ukraine to exercise provisional administration.
  • “Bank’s authorized person” means a person, who, on the basis of a statute or an agreement, is empowered to represent the bank and take certain actions of legal nature on behalf of the latter.
  • “Participants in a bank” mean bank founders, shareholders of a bank, which is a joint stock company, as well as participants in a bank, which is a limited liability company, or stakeholders in a cooperative bank
  • “Branch of a bank” means a separate structural subdivision of a bank without the legal entity status that performs banking activities on behalf of the bank.
  • “Financial holding group” means a financial institution that meets the requirements of Article 12 of the present Law.

Article 3. Application of the Law

The present Law regulates relations that arise in the course of the establishment, registration, activity, reorganization and liquidation of banks.

Provisions of the present Law shall be applicable to representative offices of foreign banks operating in the territory of Ukraine, unless otherwise established by effective international treaties (agreements) ratified by the Verkhovna Rada of Ukraine, as well as to branches of Ukrainian banks abroad and to bank related parties specified in Article 52 of the present Law.

Relevant provisions of the present Law shall also be applicable to some liabilities and responsibilities of other persons, whose activity is connected with operation of banks.

Article 4. Banking System of Ukraine

The banking system of Ukraine shall comprise the National Bank of Ukraine and other banks, which have been established and are operating in the territory of Ukraine in compliance with the present Law.

Banks in Ukraine may operate as universal or specialized banks. In terms of their specialization, banks may be classified as savings, investment, mortgage and settlement (clearing) banks.

A bank shall independently determine areas of its activity and the specialization by types of operations. The National Bank of Ukraine shall regulate activities of specialized banks through economic norms and regulations that support operations performed by these banks.

A bank shall acquire the specialized bank status when more than 50 percent of its assets are represented by assets of the same type. A bank shall acquire the status of specialized savings bank if more than 50 percent of its liabilities represent household deposits.

The National Bank of Ukraine shall exercise its regulatory and supervisory activities pursuant to the provisions of the Constitution of Ukraine, the present Law, the Law of Ukraine “On the National Bank of Ukraine,” other legislative acts and its own regulations.

Article 5. Economic Independence of Banks

Banks shall have the right to independently hold, use and manage the property they own.

The State shall not be held responsible for commitments of banks, and banks shall not be held responsible for commitments of the State, unless otherwise provided for by law or an agreement.

The National Bank of Ukraine shall not be held responsible for commitments of banks, and banks shall not be held responsible for commitments of the National Bank of Ukraine, unless otherwise provided by law or an agreement.

State power and local self-government bodies shall not be allowed to influence in any way management or employees of banks during the execution of official duties by the latter, or to interfere with bank activities, except when expressly specified by law.

Damage inflicted on a bank as a result of such interference shall be subject to compensation pursuant to the procedures specified by law.

Article 6. Organizational and Legal Form of a Bank

In Ukraine, banks shall be created in the form of a joint stock company, limited liability company or a cooperative bank.

Legislation on businesses shall be applicable to banks to the extent that does not contradict the present Law.

Article 7. State Banks

A State bank is a bank in which the State owns 100 percent of the statutory capital.

A State bank shall be established pursuant to a decision of the Cabinet of Ministers of Ukraine. In so doing, expenditures shall be provided for in the draft Law on the State Budget of Ukraine for the formation of the statutory capital of the State bank. The Cabinet of Ministers of Ukraine shall obtain a positive opinion of the National Bank of Ukraine in respect of the founding of a State bank. Obtaining a National Bank of Ukraine opinion shall be obligatory in case of the liquidation (reorganization) of a State bank, with the exception of liquidation resulting from the State bank insolvency.

The Statute and activities of a State bank shall meet the requirements of the present Law, Laws of Ukraine and regulations of the National Bank of Ukraine.

The Statute of the State bank shall be approved by a Resolution of the Cabinet of Ministers of Ukraine.

The National Bank of Ukraine shall perform the state registration of State banks under the requirements of the present Law and its own regulations.

The State shall exercise and realize ownership rights in respect of shares (stakes), which belong to it in the statutory capital of the State bank through management bodies of the State bank.

The Supervisory Council and Board shall be management bodies of a State bank.

The Revision Commission, whose personal composition and staff number shall be determined by the Supervisory Council of the State bank, shall be a controlling body of a State bank.

As a highest management body of a State bank, the Supervisory Council shall oversee the State bank Board activities in order to preserve funds attracted as deposits, guarantee their repayment to depositors and protect State interests as a State bank shareholder, and monitor other functions stipulated by the present Law.

A State bank Supervisory Council shall be made up of members of the bank’s Supervisory Council, appointed by the Verkhovna Rada of Ukraine and the President of Ukraine. People’s Deputies of Ukraine, representatives of bodies of executive power and other persons that meet the requirements set forth in this Article can be included in the Supervisory Council of a State bank in order to represent the interests of the State. The term in office of State bank Supervisory Council members shall be five years.

The President of Ukraine shall appoint seven members of the State bank Supervisory Council through the adoption of a relevant Enactment (Decree).

The Verkhovna Rada of Ukraine shall appoint seven members of the State bank Supervisory Council through the adoption of a relevant Resolution.

Members of the State bank Supervisory Council shall be citizens of Ukraine who have a higher economic or legal education, or a scientific degree in the field of economics, finance and/or law in addition to an experience of work in legislative bodies or managerial positions in central executive bodies of Ukraine, or banking institutions, or an experience of research and practical work in the area of economics, finance or law.

Members of the State bank Supervisory Council shall discharge their functions without receiving any remuneration (compensation).

A Chairman elected by the Supervisory Council from among its members shall head the State bank Supervisory Council.

Meetings of the Supervisory Council shall be effective if attended by at least 10 of its members.

Supervisory Council decisions shall be adopted by a simple majority of votes of those present at the meeting of the State bank Supervisory Council.

Internal issues pertaining to activities of the State bank’s Supervisory Council and document handling and processing shall be addressed in the Policy on the Supervisory Council to be adopted at its meeting.

Powers and authorities of the appointed State bank Supervisory Council and/or of each of its members can be terminated upon the decision of the Verkhovna Rada of Ukraine and the President of Ukraine as to the appointed members, but not earlier than one year since the appointment. In case a provisional administrator is appointed for a State bank, the power of the Supervisory Council shall be suspended in compliance with Article 78 of the present Law.

In its activities, a State bank Supervisory Council shall abide by this Law, other effective legislation of Ukraine, and the Statute of the State bank. The Supervisory Council shall not interfere into the everyday activity of the State bank.

The competence of the State bank Supervisory Council shall cover decision-making on issues stipulated by Items 1, 5 and 6 of Article 38 and Items 1-7 of Article 39 of the present Law, as well as other issues whose regulation is provided for in by this Law.

Decisions on changing the size of a State bank statutory capital and suspension of its activities shall be taken by the Cabinet of Ministers of Ukraine. In so doing, the Cabinet of Ministers of Ukraine shall obtain a positive opinion from the National Bank of Ukraine on the intention to change the size of the State bank statutory capital.

Its statute shall determine powers of an executive body of a State bank. Candidates for the position of the Chairman and members of the executive body shall be coordinated with the National Bank of Ukraine in accordance with the requirements of the present Law.

The bank, established according to the procedure set forth in Part 2 of this Article, has the right to add the word “State” to its name and to use the imprint of the State Emblem of Ukraine and the State Flag of Ukraine.

In case a decision is taken by the State concerning the partial or complete alienation of its shares (stakes) in a State bank, such a bank shall be deprived of the State bank status. Shareholders shall bring the Statute and activities of this bank in compliance with the requirements of this Law and regulations of the National Bank of Ukraine.

Article 8. Cooperative Banks

A cooperative bank shall be established pursuant to the procedures stipulated by the present Law. Legislation on cooperation shall be applied to cooperative banks to the extent that does not contradict the present Law.

Cooperative banks shall be established under the territorial principle and divided in regional and central cooperative banks.

The minimal number of participants in a local (within the oblast) cooperative bank shall be not less then 50 persons. If this number decreases and if a cooperative bank is unable to increase it to the minimal needed level within a year, the activity of this bank should be terminated by changing its organizational-legal form or through the liquidation.

Local cooperative banks shall be participants in the central cooperative bank.

In addition to the functions stipulated by the present Law, the central cooperative bank shall engage in the centralization and re-allocation of resources accumulated by local cooperative banks, and supervise the activities of regional cooperative banks.

The General Meeting of participants (stakeholders), the Supervisory Council, and the Board shall be management bodies of a cooperative bank. The Revision Commission shall be a cooperative bank’s control body. The management and control bodies of a cooperative bank shall be set up and shall exercise their powers in accordance with the present Law.

The statutory capital of a cooperative bank shall be divided into stakes. The minimal size of a cooperative bank statutory capital shall be established by the National Bank of Ukraine under the present Law.

Each cooperative bank participant shall have the right to one vote irrespective of the size of his participation in bank capital (share, stakes).

Cooperative bank profits or losses resulting from the performance in a fiscal year shall be divided among participants in proportion to the size of their stakes.

Restrictions imposed by the present Law on bank operations with related parties shall not be applicable to operations of a cooperative bank.

Article 9. Bank Associations

Banks shall have the right to set up bank associations of the following types: a bank corporation, a bank holding group, and a financial holding group. Banks can participate in industrial-financial groups with due compliance with the requirements of the antimonopoly legislation of Ukraine.

Bank associations shall be set up subject to a preliminary agreement with the National Bank of Ukraine and to the State registration through the introduction of a relevant entry in the State Bank Register.

The procedures for obtaining a permit for setting up a bank association and for its State registration are established by the National Bank of Ukraine.

A bank can participate in only one bank association. Participants in a bank association shall indicate the name of the bank association before their own names.

Participants in a bank association shall have the right to leave the association while retaining mutual obligations and adhering to the terms of the concluded agreements with other economic entities (companies).

A bank association shall publish information in official periodicals – the “Uriadoviy kurier” or the “Holos Ukrainy” – on the setting up of a bank association using the form approved by the National Bank of Ukraine, on changes in this association, and on the termination of its activities, as well as consolidated reporting following the scope and format specified by the National Bank of Ukraine.

Participants in a bank association shall be liable for the obligations assumed by other participants under the agreements concluded between them.

A bank association shall be liquidated pursuant to a decision of its participants or upon the initiative of the National Bank of Ukraine following a court order if its activity contradicts antimonopoly legislation, or poses a threat to the interests of bank depositors or to the stability of the banking system. The liquidation of a bank association shall not terminate the activity of banks – its participants.

Article 10. Bank Corporation

A bank corporation is a legal entity (bank), whose founders and shareholders shall be banks only. A bank corporation shall be set up to concentrate capital of banks participating in the corporation, increase their general liquidity and solvency, as well as to ensure the coordination and supervision over the activities of participating banks.

A bank corporation shall be subject to registration at the National Bank of Ukraine and shall be entered into the State Bank Register. The statutory capital of a bank corporation shall meet the general requirements of the National Bank of Ukraine as to the statutory capital of a newly established commercial bank.

The requirements of the National Bank of Ukraine on granting licenses to bank corporation to perform certain operations shall be established at the level of general requirements to be met by commercial banks, proceeding from the size of consolidated capital.The founding agreement and statute of the corporation shall include provisions for ensuring the fulfillment by the corporation and its members of financial liabilities and duties as to results of joint activity with the aim of ensuring interests of creditors and depositors.

Banks, which became members of a bank corporation, shall delegate powers to the corporation to perform certain operations and ensure centralization of the performance of certain functions. The following functions shall be subject to centralization within the bank corporation:

  • Settlements both among corporation members and beyond its framework.
  • Operations on money and capital markets.
  • Opening and maintenance of correspondent accounts (in the national and foreign currency).
  • Monitoring of credit risks.
  • Development and adoption of general rules for banking corporation members and procedures for performing operations and internal reporting.
  • Formation of external reporting.
  • Internal audit.

The list of centralized functions may be extended upon agreement of banks that are corporation members. The transfer of powers as to centralized performance of the above-mentioned functions from the bank to the bank corporation, shall be registered both in the statutes of corporation member banks and in the statute of the bank corporation itself.

The bank corporation shall perform the functions of a settlement center for corporation member banks, and shall not service clients (households and legal entities, with the exception of banks and other financial institutions) directly. All corporation member banks shall perform their settlements and payments (both in the national, and the foreign currency) exclusively through their correspondent accounts, opened with the National Bank of Ukraine, or directly with the bank corporation.

Banks, which became participants of the bank corporation, shall preserve their legal independence within the limits, specified by their statutes and the statute of the bank corporation. Banks, which became participants of the bank corporation, cannot enter other bank associations, except upon consent of the corporation (an exception is the participation in professional associations, set up on a non-commercial basis). Banks, which became participants of the bank corporation, shall indicate corporation membership in all their documents, concluded agreements, etc.

The name of the bank corporation shall be determined by the group founders ad libitum in compliance with the requirements of the present Law

Article 11. Bank Holding Group

A bank holding group is a bank association, which consists exclusively of banks.

The parent bank of a bank holding group shall own at least 50 percent of the share (stake) capital or votes of each of the other participants of the group that are its subsidiary banks.

A subsidiary bank cannot hold shares of the parent bank. In cases, when the subsidiary bank acquired ownership rights to parent bank shares, it shall alienate them within one month.

Bank holding groups can only be set up under condition that the foundation agreement stipulates the imposing of additional organizational functions on the principal bank of the group with respect to the group member banks, as well as establishment of joint activity management system.

Banking supervision over the activity of the bank holding group shall be carried out on an individual and consolidated basis. The parent bank shall submit consolidated, financial and statistical reports of the group under the present Law requirements.

The parent bank of the bank holding group shall bear responsibility for liabilities of its members within its contribution to the capital of each of them, unless otherwise provided for by agreements between them or by the law.

Article 12. Financial Holding Group

A financial holding group shall consist predominantly or exclusively of institutions that render financial services, including at least one bank. The parent company must be a financial institution.

The parent company shall own more than 50 percent of the share (stake) capital of each financial holding group participants.

The financial holding group parent company shall submit consolidated, financial and statistical reports of the group to supervision bodies under the present Law requirements.

The financial holding group parent company shall have the right, in the course of execution of its activities in respect of management and coordination of activities of the members thereof for enforcement of legislation and regulations of the National Bank of Ukraine, to establish rules that are mandatory for members of the financial holding group.

The financial holding group parent company shall be responsible for obligations of all its members within its contribution to the capital of each of them, unless otherwise provided by the concluded agreement thereof or law.

Article 13. Bank Unions and Associations

In order to protect and represent interests of its members, the development of interregional and international relations, ensure research and information exchange and professional interests, development of recommendations related to banking activities, the banks shall have the right to set up non-profit unions or associations.

Unions or associations shall not have the right to perform banking or entrepreneurial activities, and cannot be established in order to receive profit.

The association (union) of banks is a contractual association of banks, which does not have the right to interfere with the activity of member banks of the association (union).

Part II. Establishment, State Registration, Licensing and Reorganization of Banks

Chapter 2. Establishment of Banks

Article 14. Bank Participants

Resident and non-resident legal entities and individuals, as well as the State in the person of the Cabinet of Ministers of Ukraine or bodies authorized by it can be participants in a bank.

Holders of essential participation in a bank must have an impeccable business reputation and a satisfactory financial position.

Requirements as to business reputation and satisfactory financial position of founders and shareholders (stakeholders) that are going to acquire essential participation in the bank are established by the present Law and regulations of the National Bank of Ukraine.

Legal entities, in which the bank has essential participation, as well as public associations, religious and charity organizations cannot become bank participants.

Article 15. Name of a Bank

A bank shall have a full and abbreviated official name in Ukrainian and in a foreign language. The bank name shall contain the word “bank,” as well as a reference to the organizational and legal form of the bank.

A bank shall have a seal with its full official name.

The word “bank” and its derivative words can only be used in the name of those legal entities that are registered by the National Bank of Ukraine as a bank and have a banking license. An exception is made for international organizations, which operate in the territory of Ukraine in conformity with international agreements, ratified by the Verkhovna Rada of Ukraine and the effective legislation of Ukraine.

It is not allowed to use a bank name, which repeats the name of an existing bank or misleads one as to the types of activity the bank performs. The use of the words “Ukraine”, “State”, “Central”, “National” and derivatives thereof in the name of a bank are possible only upon consent of the National Bank of Ukraine.

The National Bank of Ukraine shall have the right to refuse the usage of the proposed name of the bank due to reasons, set forth in this Article.

A bank subdivision shall only use the name of the bank of which it is a subdivision. The name of the location of this subdivision can be added to the name of the bank structural sub-division.

Article 16. Bank Statute

The statute of a bank shall be drawn up with account of the provisions of the present Law, the Law of Ukraine “On Companies” and other laws of Ukraine.

The bank Statute shall contain the following information:

  • The name of the bank.
  • The location of the bank.
  • The organizational and legal form.
  • Type of operations to be performed by the bank.
  • The size and procedure for formation of the bank statutory capital, type of bank shares, their face value, form of share issuance (documentary or non-documentary), number of shares to be bought by the shareholders.
  • The structure of the bank management, management bodies, their authority and procedure of decision taking.
  • The procedure for the reorganization and liquidation of the bank in accordance with Chapters 5 and 17 of the present Law.
  • The procedure for introducing changes and amendments to the bank statute.
  • The size and procedure for the formation of reserves and other general funds of the bank.
  • The procedure for the profit distribution and covering losses.
  • The provisions on conducting bank audits.
  • The provisions on bank bodies of internal audit.

A decision on the introduction of changes and amendments to the bank statue becomes valid at the moment these changes and amendments are registered by the National Bank of Ukraine.

Registration of changes and amendments to the bank statute shall be performed according to the procedure established by the National Bank of Ukraine.

Chapter 3. State Registration and Licensing of Banks

Article 17. State Registration of Banks

The state registration of banks shall be conducted by the National Bank of Ukraine in accordance with the requirements of the present Law, as well as NBU regulations.

Persons authorized by bank founders shall submit the following documents for State registration to the National Bank of Ukraine:

  • Registration application.
  • Founding Agreement (with the exception of State bank).
  • Bank statute.
  • Decision on bank establishment (minutes of the foundation meeting), or a Resolution of the Cabinet of Ministers on the establishment of a State bank.
  • Business plan identifying types of activity planned for the following year and a strategy of bank’s activities for the next three years, in accordance with requirements, established by the National Bank of Ukraine.
  • Information on the financial position of those participants that will hold an essential participation in the bank. In case the bank founder is a legal entity, information should be provided on members of the Board of Directors and holders of essential participation in this legal entity.
  • Accounting, reporting and financial statements for legal entities that will hold an essential participation in the past four reporting periods (quarters), and for individuals that will hold an essential participation – a statement from the State Tax Administration on income for the last reporting period (year).
  • Information on the composition of the Supervisory Council, Board (Board of Directors), and Revision Committee.
  • Copy of the payment document confirming payment of the registration fee established by the National Bank of Ukraine.
  • Notarized copies of founding documents of members, that are legal entities and would hold essential participation in the bank.
  • Copies of a report on the holding of open subscription to shares – for banks established as an open joint stock company.
  • Data on professional skills and business reputation of the bank Chairman and members of the Board (Board of Directors) and the Chief Accountant of the bank.

The National Bank of Ukraine, within one week after the documents for state registration were submitted, shall open a temporary account for the accumulation of subscription fees of the founders and other bank participants.

The decision on state registration or denial of registration shall be taken by the National Bank of Ukraine not later than within three months from the moment the full package of documents, specified in this Article, was submitted.

The National Bank of Ukraine has the right to require corrections to be introduced to the submitted documents.

The registration of banks is performed through a relevant entry in the State Bank Register. After that a bank shall acquire the status of legal entity.

The National Bank of Ukraine shall issue a State Registration Certificate to the bank in the form established thereof.

Article 18. Grounds for the Denial of the State Registration

The National Bank of Ukraine can refuse to register the bank in the following cases:

  • Violation of the bank establishment procedure.
  • Founding documents of the bank fail to comply with the legislation of Ukraine.
  • An incomplete package of documents necessary for the State registration was submitted, or these documents failed to meet the requirements of the present Law or NBU regulations.
  • The National Bank of Ukraine has a proof of the lack of impeccable business reputation or of satisfactory financial position of at least one of the founders that holds essential participation in the bank.
  • Professional skills and business reputation of the Chairman of the executive body and Chief Accountant of the bank, as well as members of the bank executive body, fail to meet requirements of the National Bank of Ukraine.

The National Bank of Ukraine shall inform the bank’s authorized persons on incompleteness of the document package and/or inadequacy of professional skills and business reputation of the Chairman of the Board (Board of Directors) and Chief Accountant not later than one month after the day the documents were submitted.

The National Bank of Ukraine shall take a justified decision on the denial to register a bank. A copy of the decision on the denial to register a bank, certified by the National Bank of Ukraine, shall be sent to the bank’s authorized person by a recommended letter or submitted with the delivery confirmed by signature.

The denial to register a bank cannot be made on grounds other than those listed in this Article.

Article 19. Banking License

bank has the right to perform banking activities only upon obtaining a banking license.

Not a single person shall have the right to simultaneously engage in attracting deposits and other funds subject to repayment, extending loans and servicing accounts without a banking license. Persons, culpable of carrying out banking activities without a banking license, shall bear criminal, civil or administrative responsibility in accordance with the legislation of Ukraine.

The banking license shall be issued by the National Bank of Ukraine upon the petition of a bank, provided there are documents confirming the following:

the availability of paid-in and registered subscribed bank capital in the amount, established by the present Law;

the bank has appropriate banking equipment, computers, software, and premises in compliance with NBU requirements;

there are at least three persons, appointed members of the Board (Board of Directors) of the bank, who have an appropriate education and experience necessary to manage the bank.

The National Bank of Ukraine can refuse to issue a license if the bank fails to meet conditions set forth in this Article within one year from the date of the State registration of the bank. In this event the State registration of the bank will be cancelled and the bank liquidated.

The decision to grant or to deny a banking license shall be taken by the National Bank of Ukraine within one month from the day it receives a full package of the documents listed in this Article.

The banking license cannot be transferred to third parties.

Article 20. Grounds for Revocation of Banking License

The National Bank of Ukraine can revoke the banking license exclusively in the following cases:

  • It is revealed that documents, submitted for the receipt of the banking license, contain untrue information.
  • The bank failed to perform a single banking operation during one year from the day the banking license was granted.
  • In case of the violation of the present Law or NBU regulations, which led to a significant loss of assets and insolvency of the bank.
  • On the basis of a conclusion of the provisional administrator on the inability to bring the bank into legal conformity with requirements of the present Law and NBU regulations.
  • The impracticality of implementing the plan of the provisional administration as to the reorganization of the bank.

The National Bank of Ukraine shall immediately inform the bank that its banking license has been revoked. The bank shall, within three days after receiving the corresponding decision, return its banking license to the National Bank of Ukraine.

The bank, on the day of receiving the decision to revoke the banking license on grounds set forth in Item 1, part I of this Article, shall terminate all banking operations and take measures to ensure the fulfillment of its obligations to its depositors and other creditors in compliance with agreements concluded and provisions of the present Law.

The decision of the National Bank of Ukraine to revoke a banking license shall be published in the “Uriadoviy Kuryer” or “Holos Ukrainy” newspapers. The revocation shall be grounds to file an action to the court on the liquidation of the bank.

Article 21. Preliminary Permit for Establishing a Bank with Foreign Capital

In order to establish a bank with foreign capital, its founders shall obtain a preliminary permit from the National Bank of Ukraine. In order for an operating bank to obtain the status of a bank with foreign capital, its Board (Board of Directors) shall obtain a preliminary permit from the National Bank of Ukraine.

In order to obtain a preliminary permit for establishing a bank with foreign capital or for a bank to obtain the status of a bank with foreign capital, the following documents should be submitted to the National Bank of Ukraine:

  • petition for granting a preliminary permit;
  • information on the composition of founders, their business reputation and availability of funds needed for the establishment of such a bank;
  • permit of a foreign controlling body to participate in the establishment of a bank in Ukraine or written assurance of the foreign founder as to the absence in the legislation of his/her country of origin of a requirement to obtain such a permit;
  • information on the underwriter and its business reputation, an agreement with the underwriter in case the bank took a decision to sell bank shares in international markets through underwriting.

The petition shall be considered by the National Bank of Ukraine within one month from the day it was received. The denial of the National Bank of Ukraine to issue a permit should be submitted in writing and with an appropriate explanation.

Article 22. Specific Features of the Registration of Banks with Foreign Capital

Should the bank obtain the status of a bank with the foreign capital, provided that a foreign investor acquires essential participation in the latter, the foreign investor, or upon his/her instruction the share issuing bank, underwriter or any other legal entity or individual that has the power of attorney from the foreign investor, shall submit the following documents for the registration of the latter in addition to the documents listed in Article 17 of the present Law:

  • A notarized copy of the decision, from the place it was issued, of the authorized management body of the foreign investor on participation in a bank in Ukraine.
  • A written consent on participation of the foreign investor in the bank in Ukraine issued by the state or another authorized controlling body of the country, where the head office of the foreign investor is registered, should the legislation of that country require the mentioned consent, or a written assurance from the foreign investor as to the absence of a requirement for a preliminary permit to make investments abroad.
  • A notarized extract from the trade (banking) register, from the place it was issued, or another official document, which confirms the registration of the foreign participant in the country, where the head office of the foreign investor is registered.
  • A notarized copy of the foreign audit firm opinion, from the place it was issued, on the financial position of the foreign investor at the end of the last full calendar year. In case the indicated conclusion is provided by a foreign audit firm, not included in the list of foreign audit organizations, recognized by the National Bank of Ukraine, such a conclusion should be confirmed by a Ukrainian audit organization.

Documents listed in Items 1, 2 (except the written assurance of the foreign investor), 3, and 4 in part I of this Article should be legalized pursuant to the established procedure, unless otherwise provided by international agreements, ratified by the Verkhovna Rada of Ukraine.

In cases a foreign investor is an individual, the following documentation shall be submitted:

  • A written consent for the participation of the foreign investor in a bank in Ukraine, issued by a state or another authorized controlling body of the country, the legislation of which requires such permit; or written assurance of the foreign investor as to the absence of requirements for a preliminary permits for investments abroad in the legislation of the country of residence. The written consent should be legalized at a Consulate of Ukraine, unless otherwise stipulated by an effective international agreement, ratified by the Verkhovna Rada of Ukraine.
  • A form containing, in particular, information that the individual has no previous convictions.

In case the documents indicated in this Article are written in a foreign language, they should be supplemented with a notarized translation into Ukrainian.

The National Bank of Ukraine shall have the right to reject the registration of a bank with essential foreign participation if at least one of the documents, specified in this Article is not available or any of them is not executed properly. The rejection shall be submitted in writing with the indication of corresponding reasons.

Chapter 4. Branches and Representative Offices of Banks

Article 23. Procedure for Opening Branches and Representative Offices of Banks in the Territory of Ukraine

Branches of banks shall be opened upon the approval of the National Bank of Ukraine on the basis of the following documents:

  • Petition of a bank to open its branch, specifying location and principal activities of the proposed branch.
  • Decision of the bank Supervisory Council of the bank on the opening of a branch.
  • Policy on the branch approved by the Supervisory Council of the bank.
  • Information on the branch manager and chief accountant.

The National Bank of Ukraine shall verify the compliance of premises and equipment of the branch with NBU requirements

The National Bank of Ukraine shall have the right to refuse approval of the establishment of a branch on any of the following grounds:

  • Submitted documents fail to meet requirements of the present Law or NBU regulations
  • The premises and equipment of the branch do not meet requirements of the National Bank of Ukraine as to the safekeeping of valuables (in case a branch intends to work independently with cash and valuables).
  • Proposed candidates for the position of a manager and chief accountant of the branch fail to meet requirements of the present Law as to professional qualifications/adequacy and business reputation.
  • It was revealed that the applicant bank is experiencing financial or legal problems, which indicate possible negative consequences for clients or for potential bank clients as a result of branch opening.

Registration of bank branches shall be performed by the National Bank of Ukraine within one month from the moment of submission of all required documents by entering relevant information in the State Bank Register.

Banks shall submit information to the National Bank of Ukraine on the opening of a representative office, to be entered into the State Bank Register.

Article 24. Procedure for Registration of Foreign Bank Representative Office in Territory of Ukraine

The registration of representative offices of non-resident banks shall be carried out by the National Bank of Ukraine.

The following documents shall be submitted for registration:

  • Application for the registration of a foreign bank representative office signed by an authorized person.
  • Extract from the bank (trade) register or another official document, which confirms the registration of the foreign bank.
  • Policy on the representative office.
  • Power of attorney from the foreign bank to perform representative functions.

The above documents, with the exception of the application for the registration of a foreign bank representative office, shall be notarized at the place of their issuance, and legalized at a Consulate institution of Ukraine unless otherwise provided by an effective international agreement, ratified by the Verkhovna Rada of Ukraine, and must be accompanied by a notarized translation into Ukrainian.

The National Bank of Ukraine can reject the registration of a foreign bank representative office in case of violations of the registration procedure, non-conformity of the submitted documents to the legislation of Ukraine, doubtful information as well as failure to meet registration conditions or exceeded authority in relation to the spheres of activities of the representative office. The denial shall be submitted in writing specifying motives thereof.

Article 25. Subsidiary Banks, Branches and Representative Offices of a Ukrainian Bank in Territory of Other Countries

Ukrainian banks shall have the right to establish subsidiary banks, branches and representative offices in the territory of other countries on the basis of a NBU permit. The same requirements are set forth for opening subsidiary banks, branches and representative offices of Ukrainian banks in the territory of other states as those for opening branches and representative offices of banks in the territory of Ukraine, provided the National Bank of Ukraine grants a permit for investments abroad in connection with the establishment of a branch or a representative office of the bank in the territory of another country.

In order to establish a subsidiary bank, branch or representative office of a Ukrainian bank abroad, this bank shall provide the National Bank of Ukraine with a business plan and economic justification of the expediency for establishing a subsidiary bank, branch or representative office of the bank abroad.

The subsidiary bank, branch or representative office of a Ukrainian bank in the territory of another country shall undergo registration in conformity with the legislation requirements of the respective country.

Within one month the bank must inform the National Bank of Ukraine about the opening of a subsidiary bank, branch or representative office in the territory of another country and provide copies of the relevant documents on their registration..

Chapter 5. Reorganization of a Bank

Article 26. Ways of Bank Reorganization

The reorganization of a bank shall be performed voluntarily upon a decision of its owners, or compulsory upon the decision of the National Bank of Ukraine.

A reorganization can be carried out by a merger, takeover, splitting, separation, and transformation.

Merger means termination of activity of two or more banks as legal entities and transfer of their property, funds, rights and obligations to the successor bank established as a result of the merger.

Takeover means termination of activity of one bank as a legal entity and the transfer of its property, funds, rights and obligations to another bank.

Splitting means termination of activity of one bank as a legal entity and the transfer of its property, funds, rights and obligations, in appropriate portions, to the banks established as a result of the reorganization of this bank through splitting.

Separation means a transformation of a bank as a legal entity and the transfer of a certain portion of its property, funds, rights and obligations to the bank established as a result of reorganization.

Transformation means change of organizational and legal form of an entity.

Article 27. Conditions for Bank Reorganization

The procedure for compulsory reorganization of banks is set forth by the present Law and regulations of the National Bank of Ukraine.

Reorganization upon the decision of bank owners shall be carried out in accordance with the legislation of Ukraine on companies provided a preliminary permit was obtained from the National Bank of Ukraine.

In order to obtain a permit for bank reorganization, an application shall be submitted to the National Bank of Ukraine with the necessary substantiation and calculations, which would demonstrate positive consequences for depositors and other creditors of the bank.

The National Bank of Ukraine shall not give a permit for a bank reorganization in the event there are sufficient grounds to believe, that the reorganization poses a threat to the interests of depositors and other creditors, and the bank, established as a result of the reorganization, will fail to meet requirements regarding economic norms of its activity, bank registration procedure and licensing of their activity.

The National Bank of Ukraine shall grant a permit or issue a rejection for the reorganization of the bank within one month from the moment the application of the bank for reorganization was received.

Compulsory reorganization shall be carried out in case of a significant threat to the bank’s solvency.

Article 28. Decision on Reorganization

The decision on reorganization of a bank, with the exception of transformation, shall include the following data on:

  • An agreement on reorganization in case of a merger or takeover.
  • The appointment of commission members to carry out the reorganization.
  • The appointment of members of the Revision Commission to take an inventory, review valuables in the books of the bank (banks).
  • The appointment of an independent auditor that has a NBU certificate
  • The timeframe for reorganization.
  • The composition of the Board (Board of Directions) after the reorganization.

The reorganization shall begin after the National Bank of Ukraine approves the reorganization plan, which, apart from all other necessary measures, should provide for the submission to the National Bank of Ukraine of relevant documents, which are necessary for the state registration of the new bank or for registration of the changes and amendments to the foundation documents of the existing bank.

The bank shall be considered reorganized at the moment the National Bank of Ukraine introduces amendments into the State Bank Register.

In case of compulsory reorganization, decisions stipulated by Items 2-6, part 1 of this Article shall be taken by the National Bank of Ukraine, and the agreement on reorganization shall not be signed. General conditions for reorganization shall be set forth in a Resolution of the NBU Management, and be mandatory for execution by all parties.

Article 29. Agreement on Merger or Takeover

An agreement on merger or takeover shall be concluded in writing by banks being reorganized through merger or takeover.

The agreement on merger or takeover shall contain provisions that regulate issues set forth in Article 28 of the present Law.

The agreement on merger or takeover shall enter into force the moment it has been approved by a 2/3 majority of shareholders (participants) at the general meeting of each bank.
Part III. Capital, Management and Requirements to Activities of Banks

Chapter 6. Capital, Funds and Reserves of a Bank

Article 30. Structure of Bank Capital

Capital of a bank shall include:

  • Main capital.
  • Additional capital.

The main capital of a bank includes paid-in and registered statutory capital and disclosed reserves, which are formed or increased from retained profits, share premiums and additional contributions of shareholders to capital, risk provisioning fund, which is formed for undetermined risk in banking operations, with the exception of losses for the current year and intangible assets. Disclosed reserves also include other funds of the same quality, which should correspond to the following criteria:

  • Payments to the funds should be made from profits after taxation or from profits before taxation, adjusted for all potential tax obligations.
  • The funds and cash inflow and outflow should be separately disclosed in a published statements of the bank.
  • A bank shall have the funds available to cover losses to be instantly used in unlimited amounts if losses are incurred.
  • Losses can not be covered directly from the funds. They should be shown in the income statements.

If approved by the National Bank of Ukraine, the additional capital can include:

  • Undisclosed reserves (except for the fact that such reserves are not shown in the published balance sheet of the bank, they should be of the same quality and nature as disclosed capital reserve).
  • Revaluation reserves (fixed assets and unrealized value of the “hidden” revaluation reserves resulting from long-term holding of securities recorded in the balance sheet at the historic cost of their acquisition);
  • Hybrid (debt/capital) capital instruments, which should meet the following criteria:

    · they are unsecured, subordinated and fully paid;

    · they cannot be repaid on the initiative of the holder;

    · they can freely participate in the covering of losses without demanding that the bank terminates trading transactions;

    · they allow delay in servicing obligations as to interest payments in case the level of profitability does not allow to perform such payments.

  • Subordinated debt (ordinary unsecured debt capital instruments, which under contract conditions may not be withdrawn from the bank earlier than after a 5 year period, and in case of bankruptcy or liquidation shall be returned to investors after reimbursement of claims of all other creditors). In so doing, the amount of such funds, included into capital, may not exceed 50% of main capital with the annual decrease by 20% of its initial value within the last 5 years of the contract.

    The National Bank of Ukraine has the right to determine, in the form of its resolutions, other line items of the bank balance sheet to be included into additional capital as well as conditions and a procedure for such inclusion. Additional capital may not exceed 100% of main capital.

Article 31. Statutory capital at Moment of Bank Registration

The minimum size of the bank statutory capital at moment of registration may not be less than, as follows:

  • EURO 1 million – for local cooperative banks;
  • EURO 3 million – for banks that carry out their activity in the territory of one oblast;
  • EURO 5 million – for banks that carry out their activity throughout the territory of Ukraine.

The recalculation of the amount of the statutory capital into UAH shall be carried out at the official foreign exchange rate, established by the National Bank of Ukraine on the day of the signing of the foundation agreement.

Banks shall adjust the size of the statutory capital using the UAH devaluation or revaluation index at the expense and within the limit of bank gross profits or losses according to the methodology established by the National Bank of Ukraine.The National Bank of Ukraine has the right to establish, at the moment of registration, a differentiated minimum size of the statutory capital for specific banks depending on their specialization. This size shall not be less than the amount specified in this Article.

Article 32. Procedure for Formation of the Statutory Capital of a Bank

The statutory capital of a bank shall be formed in accordance with the requirements of the present Law, the legislation of Ukraine and foundation documents of the bank.

The formation of and increase in the statutory capital may be carried out exclusively through monetary contributions. Monetary contributions for the formation and increase of the statutory capital of a bank by Ukrainian residents shall be provided in Hryvnias, while non-residents provide contributions in hard currency or in Hryvnias.

The statutory capital of the bank shall not be formed from unconfirmed sources.

A bank shall have the right to increase its statutory capital after all participants have fully fulfilled their commitments in respect of payment for their shares or stakes and previously declared subscribed capital has been fully paid.

A bank does not have the right to decrease the size of the regulatory capital lower than the established minimum level without approval of the National Bank of Ukraine. The capital of the bank may not be less than the statutory capital needed to set up a bank..

It is prohibited to use budget funds for the bank capital formation if these funds are earmarked differently.

Article 33. Bank Shares and Stakes

Banks shall issue their own shares and announce subscription to stakes in compliance with the Ukrainian legislation on companies and securities taking into account specific points defined by the present Law.

Banks are not allowed to issue bearer shares.

Existence of losses is not an obstacle for announcing subscription to shares or stake of the bank or increase of the statutory capital of the bank.

Banks shall have the right to purchase their own shares or stakes with further written notification of the National Bank of Ukraine on contracts concluded, which should be sent within 5 days after the date of signing the contract. Banks may not purchase their own shares if this may lead to a decrease in the main or regulatory capital to the level lower than the minimal one.

The bank shall, 15 calendar days prior to the singing of an agreement, notify the National Bank of Ukraine in writing of its intention to acquire 10 and more percent of own shares or stock of the general issue. The National Bank of Ukraine shall have the right to prohibit such purchase of bank’s own shares or stock if this may result in a deterioration of the bank’s financial condition.

The issuer bank sells its own shares on the primary market directly or through underwriters. The Bank shall be permitted to act as an agent for the purchase and sale of its own shares or stake.

Article 34. Essential Participation

A legal entity or an individual, wishing to acquire an essential participation in a bank or increase it so that this entity or person would directly or indirectly own or control 10%, 25 %, 50% and 75% of the statutory capital or voting rights of bank management bodies, shall obtain a written permission from the National Bank of Ukraine.

To obtain such a permission, the applicant must submit information, specified in NBU regulations, concerning the financial position and business reputation of the future owner of the essential participation of the bank.

The National Bank of Ukraine must approve or reject the application for a permit to purchase or increase essential participation of a bank within one month upon receipt of a complete package of required information. The refusal to grant the permit for the purchase or increase of essential participation in the bank shall be submitted in writing specifying relevant reasons.

The National Bank of Ukraine shall not grant permission for the acquisition or increase of the essential participation in a bank in accordance with part 1 of this Article in the following cases:

  • The person who will acquire the essential participation does not have an impeccable business reputation. If the applicant is a legal entity, this criterion shall cover members of an executive body and Supervisory Council of the legal entity, as well as holders of essential participation that are individuals.
  • The absence of own funds in an amount, sufficient to make the declared contribution.
  • The purchase or increase of essential participation will threaten either interests of depositors and other creditors of the bank, or the development of the competitive environment in the banking system

If a person holds an essential participation in a bank, or increases his/her/its participation in a bank to the level set forth in part 1 of this Article without obtaining the written permission from the National Bank of Ukraine, the latter shall have the right to prohibit direct or indirect, full or partial use by such a person of voting rights of acquired shares (stake) and any participation in the management of bank affairs.

In case there is a prohibition to exercise voting right according to the acquired shares (stakes), the right to participate in the voting shall be transferred to an authorized person, appointed by the National Bank of Ukraine upon the petition of the bank. The authorized person shall, in the process of the voting, be obliged to act in the interests of the qualified and prudential management of the bank.

Decisions of the general meeting of participants that were taken with the use of the voting right of acquired shares (stakes), with respect of which a temporary prohibition of using it is established, shall not have a legal force.

Article 35. Adequacy of Capital

Banks, as well as essential participation holders shall maintain the normative ratio of the regulatory capital to risk-weighted assets – capital adequacy. Banks are obliged to maintain their regulatory capital at a level, which is not less than 8% of risk-weighted assets and off-balance sheet liabilities. For a bank, which starts its operational activity, this norm must be at least 15% within the first 12 months and not less than 12% within the next 12 months. The National Bank of Ukraine also has the right to set a minimum ratio of the regulatory capital to total assets.

A procedure for calculating bank capital adequacy norm and a minimum size of the bank’s regulatory capital are determined by the present Law and regulations of the National Bank of Ukraine.

If the level of the regulatory capital of a bank reaches a level lower than the one established by the National Bank of Ukraine, the bank shall be obliged, within one month, beginning with the day the decrease of capital was established, to submit to the National Bank of Ukraine for review an action plan on the procedure and terms of restoring the regulatory capital.

The bank shall be prohibited to pay dividends or distribute capital in any other way, if such payments or distribution will result in a violation of the capital adequacy norm.

Capital of a banks shall not be lower than the minimal statutory capital amount stipulated by Article 31 of this Law.

If in the previous year the bank’s activity was unprofitable, the bank shall be allowed to pay the dividends or distribute the capital in any other way within the amount, which does not exceed 50% of the difference between bank capital and the regulatory capital.

Article 36. Reserves and Other Funds of the Bank

Banks shall form a reserve fund to cover possible losses in all asset items and off-balance sheet liabilities.

Payments provided for the reserve fund shall not be less than 5% of the bank’s profit until the reserve fund reaches 25% of the bank’s regulatory capital.

Should the activity of the bank pose a threat to interests of depositors and other creditors of the bank, the National Bank of Ukraine has the right to require an increase in reserves and annual provisions thereto.

Banks shall form other funds and reserves to cover losses in assets in conformity with NBU regulations.

Chapter 7. Bank Management

Article 37. Bank Management and Controlling Bodies

Bank management bodies are the General Meeting of bank participants, the Supervisory Council and the Board (Board of Directors) of the bank.

The revision commission and internal audit shall be controlling bodies of the bank.

Article 38. General Meeting of Participants

A supreme management body of a bank shall be the General Meeting of participants.

The General Meeting of bank participants shall have the authority to take decisions on the following matters:

  • Definition of basic trends in bank’s activities and approval of reports on the implementation thereof.
  • Introduction of amendments to the bank’s Statute.
  • Changes in the size of the bank’s statutory capital
  • Appointment and dismissal of the Chairmen and members of the bank Supervisory Council and Revision Commission.
  • Approval of annual results of bank activities including its subsidiaries, approval of reports and conclusions of the revision commission and external auditors.
  • Distribution of profits.
  • Termination of bank activities, appointment of a liquidator, approval of the liquidation balance sheet.

The bank’s Statute may include other issues within the competence of the General Meeting of participants. Powers, set forth in Items 1-7 of this Article, belong to the exclusive competence of the General Meeting of participants. Other powers of the General Meeting of participants may be delegated to the competence of the bank Supervisory Council.

Article 39. Bank Supervisory Council

The Supervisory Council of the bank shall be elected at the General Meeting of participants from among bank participants or their representatives. Members of the bank Supervisory Council cannot be members of the Board (Board of Directors) or the Revision Commission of the bank.

The Supervisory Council of the bank shall perform the following functions:

  • Appoint and dismiss the Chairman and members of the Board (Board of Directors) of the bank.
  • Control the activity of the Board (Board of Directors) of the bank.
  • Appoint an external auditor.
  • Set forth a procedure for revision and control over financial and economic activity of the bank.
  • Take decisions on covering losses.
  • Take decisions on establishment, reorganization and liquidation of subsidiaries, branches and representative offices of the bank, approve their statutes and regulations.
  • Approve the terms of compensation and incentives for Board members.
  • Prepare proposals on issues to be considered at the General Meeting of participants.
  • Exercise other authorities, delegated by the General Meeting of participants.

Powers and working procedures for the bank Supervisory Council shall be determined by the bank Statute or a Policy on the Board of the bank, approved by the General Meeting of participants.

Article 40. Bank Executive Body

The Board of the bank (Board of Directors) shall be an executive body of a bank. It shall manage everyday activities of the bank, the formation of funds needed for its activities in compliance with the Statute, and be responsible for the efficiency of its work in accordance with principles and procedures established by the bank Statute, decision of the General Meeting of participants and the Supervisory Council.

Within its competence the Board (Board of Directors) acts on behalf of the bank and reports to the General Meeting of participants and the Supervisory Council of the bank

The Board (Board of Directors) of the bank shall act on the basis of a policy approved by the General Meeting of participants or by the Supervisory Council of the bank.

The Chairman of the Board (Board of Directors) shall supervise the work of the executive body and have the right to represent the bank without a power of attorney.

Article 41. Revision Commission

The Revision Commission shall exercise control over financial and business activities of the bank.

The Revision Commission shall:

  • Control adherence of the bank to the legislation of Ukraine and NBU regulations.

  • Review reports of internal and external auditors, and prepare respective proposals for the General Meeting of participants

  • Submit proposals to the General Meeting of participants or the Supervisory Council of the bank on any issues within the competence of the Revision Commission, which concern financial safety and stability and protection of interests of bank clients.

The Revision Commission shall be elected by the General Meeting of participants of the bank from among participants or their representatives. The Revision Commission shall report to the General Meeting of participants of the bank.

Members of the Revision Commission may not be persons employed by the bank.

The Revision Commission shall review financial and business activities of the bank by the instruction of the General Meeting of participants, the Supervisory Council, or upon a request of a participant (participants) who jointly hold over 10% of votes.

The Revision Commission shall be entitled to involve external and internal experts and auditors in revisions and audits.

The Revision Commission shall report on the results of audits and revisions to the General Meeting of participants or the Supervisory Council of the bank. The Revision Commission shall prepare conclusions in respect of reports and bank balance sheets. The General Meeting of participants shall not have the right to approve financial statements of the bank without a conclusion of the Revision Commission.

Members of the Revision Commission may take part, with the right of a deliberative vote, in meetings of the Supervisory Council and the Board (Board of Directors) of the bank..

Meetings of the Revision Commission shall take place as required, at least once a year.

Extraordinary meetings of the Revision Commission may be convened by the Supervisory Council of the bank or upon the initiative of shareholders, who hold over 10 percent of the votes.

Decisions are taken by a majority of votes of Revision Commission members.

Powers of the Revision commission of the bank are defined by the bank Statute, while the procedure of its operations – by a Policy on the Revision Commission, which are approved by the General Meeting of bank participants (shareholders).

Article 42. Requirements for Bank Managers

Managers of a bank shall be the chairman, his deputies and members of the Bank Council, the chairman, his deputies and members of the Board (Board of Directors), chief accountant, his deputy and managers of bank separate structural divisions.

Managers of banks shall be competent individuals who meet the following requirements:

  • Higher education in the field of economics, law or management, as appropriate for the position to be occupied (this requirement does not apply to Supervisory Council members).
  • Banking experience on relevant position, not less than three years (this requirement does not apply to Supervisory Council members).
  • Impeccable business reputation.

The Chairman of the Board (Board of Directors) of the bank and the Chief Accountant shall take office after the National Bank of Ukraine gives its consent in writing

The Chairman of the Board (Board of Directors) of the bank and the Chief Accountant should have previous bank managerial experience.

Article 43. Obligations in Respect to Protection of Bank Interests

Bank managers, in carrying out their duties under the present Law, must act in the best interests of the bank and its clients, and must place the bank’s interests before their own.

In particular, bank managers shall be obliged to:

  • Demonstrate appropriate attitude to the fulfillment of their professional duties
  • Make decisions within the authority granted.
  • Not take advantage of their professional status for their personal benefit.

Article 44. Risk Management

The bank shall set up a standing unit of analysis and management of risks, which would be responsible for setting limits in respect to specific operations, risk limits for counterparts, countries of contra parties, and balance sheet structure in accordance with resolutions of the Board (Board of Directors) on the issues of risk policy and profitability of bank operations.

In order to ensure additional measures of risk management, the banks shall create standing committees, in particular:

  • A credit committee, which evaluates the quality of bank assets on a monthly basis and prepares proposals on the formation of reserves for possible losses resulting from their devaluation.
  • An assets and liabilities management committee, which, on a monthly basis, reviews the cost of liabilities and the profitability of assets, and takes decision on interest margin policy, reviews decisions on matching maturity of assets and liabilities, and provides relevant bank units with recommendations on the elimination of arising time differences.
  • A tariff committee, which, on a monthly basis, analyzes a correlation between the cost of services and the competitiveness of existing tariffs, and is responsible for the bank’s policy in the are of operational income.

Banks should independently take decisions on setting up bodies of financial risk management in order to ensure favorable financial conditions for the protection of interests of depositors and other creditors.

Article 45. Internal Audit

Banks shall establish an internal audit service, which is a body of operative control of the Supervisory Board of a bank.

(Part 1 of Article 45 with changes made pursuant

to the Law of Ukraine of 05.06.2003, N 914-IV)

The internal audit service shall perform the following functions:

  • Supervision of everyday activities of the bank.
  • Control over compliance with laws, regulations of the National Bank of Ukraine and decisions of bank management bodies.
  • Reviews of results of everyday financial activities of the bank.
  • Analysis of information and reports on activities of the bank, on professional activities of its employees, and abuse of authority/responsibilities by bank officials.
  • Development of conclusions and recommendations to the Supervisory Board by the results of audits.

    (Point 5 of Part 2 of Article 45 with changes made pursuant

    to the Law of Ukraine of 05.06.2003, N 914-IV)

  • Other functions associated with supervision and control over activities of the bank.

The internal audit service shall be accountable to the Supervisory Board of the bank and report to them, acting on the basis of the Regulations approved by the Supervisory Board.

(Part 3 of Article 45 with changes made pursuant

to the Law of Ukraine of 05.06.2003, N 914-IV)

The internal audit service shall have the right to study all documents of the bank, and supervise the work of any division of the bank. The internal audit service is authorized to require written explanations from specific bank officials in respect to weaknesses revealed in their work.

A candidate for the position of the internal audit manager shall be agreed upon with the National Bank of Ukraine.

The internal audit service shall not be held responsible for and shall not have authority over operations which it audits.

The internal audit service shall be responsible for the scope and accuracy of reports submitted to the Supervisory Board on issues pertaining to its competence, as stipulated by this Law.

(Part 7 of Article 45 with changes made pursuant

to the Law of Ukraine of 05.06.2003, N 914-IV)

Internal audit employees, when appointed to their position, shall sign a written commitment not to disclose information on the bank activities and keeping bank secrecy as per Article 10 of this Law.

Article 46. Responsibility to Inform the National Bank of Ukraine

The Board (Board of Directors) of the bank shall, within 3 banking days, be obliged to inform the National Bank of Ukraine on the following:

  • Dismissal of any manager (managers) of the bank and a recommended replacement for this position.
  • Changes in the legal address and location of the bank and its separated structural subdivisions.
  • Losses in the amount that exceeds 15% of the bank’s capital.
  • When capital decreases to a level lower then that of the regulatory capital.
  • There is at least one reason for the appointment of a provisional administrator or a liquidator.
  • Termination of banking activities.
  • If a bank manager, an individual holder of essential participation, or a representative of a corporate holder of essential participation are accused of felony.

The National Bank shall have the right to define a another list of information which may important for banking supervision.

Chapter 8. Requirements to Bank Activities

Article 47. Banking Operations

Banks shall have the right to conduct the following operations based on a banking license:

  • To open deposits for legal entities and individuals.
  • To open and maintain current accounts of clients and correspondent banks, including transfer of funds from these accounts by means of payment documents and posting funds to these accounts.
  • To place attracted funds in their own name, under their own terms and at their own risk.

In addition to the above operations listed in part 1 of this Article, a bank has the right to perform the following operations and contracts:

  • Operations with foreign currency.
  • Issuing their own securities.
  • Organization of the purchase and sale of securities upon instruction of clients.
  • Performance of operations on the securities market on their own behalf (including underwriting).
  • Granting guarantees, warranties and other liabilities in favor of third persons that envisage execution in cash.
  • Acquisition of the right to claim the fulfillment of liabilities in the cash form for the delivery of goods and rendering of services, accepting the risk of satisfying these claims and receipt of payments (factoring).
  • Leasing.
  • Responsible safekeeping and renting of safety boxes for storing valuables and documents.
  • Issue, purchase, sale and servicing of checks, veksels and other working payment instruments.
  • Issue of bank payment cards and performance of operations using these cards.
  • Provision of consulting and information services pertaining to banking operations.

Operations, defined in Items 1-3, part 1 of this Article, belong to banking operations exclusively, the aggregate performance of which is permitted only to legal entities possessing a banking license. Other legal entities have the right to effect operations, which are set forth in Items 2-3, part 1 of this Article, on the grounds of the license to perform specific banking operations, while other operations and agreements stipulated by this Article may be conducted in accordance with the procedure set forth by laws of Ukraine.

Banks may also conduct the following operations if they obtain a written permission from the National Bank of Ukraine:

  • Investment into statutory funds and shares of other legal entities.
  • Issuance, circulation, repayment (distribution) of a state and other monetary lotteries;
  • Transportation of currency valuables and collection of funds;
  • Operations, on behalf of clients or on their own behalf:with money market instruments;with instruments based on exchange and interest rates; with financial futures and options.
  • Trust management of funds and securities, under agreements with legal entities and individuals.
  • Depository activity and the maintenance of registers of registered securities holders.

The National Bank of Ukraine shall establish a procedure for granting permission to banks to conduct operations set forth in Items 1-4, part 2 of this Article. Such permission shall be granted if:

  • The bank’s regulatory capital meets NBU requirements, which is confirmed by an independent auditor.
  • The bank is not subject to any enforcement actions.
  • The bank has submitted a plan, specifying how such activity will be carried out, and this plan is approved by the National Bank of Ukraine.
  • The National Bank of Ukraine concludes that the bank has sufficient financial capacity and expertise to perform this activity.

The bank shall have the right to implement other agreements in compliance with the Ukrainian legislation.

The National Bank of Ukraine shall have the right to set forth special requirements, including the requirement to raise the level of the regulatory capital of a bank or other economic norms, related to a particular type of activities stipulated in this Article.

Commercial banks shall independently set interest rates and commission fees on their operations.

Article 48. Restrictions of Banking Activities

Banks shall be prohibited from carrying out activities in the sphere of material production, trade (with the exception of the sale of commemorative, jubilee and investment coins) and insurance, but may act as insurance intermediary.

Specialized banks (with the exception of the savings bank) shall be prohibited from attracting deposits from individuals in the amounts exceeding 5% of bank capital.

A bank can own real estate the total value of which does not exceed 25 percent of its capital. This restriction does not include the following:

  • Premises that ensure technological banking functions.
  • Property that was transferred into the bank ownership in realization of pledge holder rights under collateral agreement terms.
  • Property acquired by the bank in order to prevent losses, on condition that the bank should alienate this property within one year from the moment of obtaining ownership rights.

Article 49. Credit Operations

In this Article, credit operations mean operations, listed in Item 3, part 1, and Items 3 – 7, part 2 of Article 47 of the present Law.

Banks can conclude consortium crediting agreements in order to provide joint financing. Within the framework of such an agreement, participating banks determine terms for extending credit and appoint a bank, which is responsible for the implementation of the agreement. Member banks shall bear risks on extended credit proportionally to their contributions to the consortium.

A bank shall have a subdivision, that would have a functions of lending and management of credit-related operations.

Banks shall be prohibited to directly or indirectly extend credit to acquire their own securities. The use of securities of their own emission as collateral shall be possible only with the NBU permission.

During the extension of credits, banks shall adhere to general principles of lending, including evaluation of creditworthiness of borrowers and the availability of collateral, and adhere to requirements concerning risk concentration, established by the National Bank of Ukraine.

A bank can not extend credits at an interest rate which is lower than the interest rate on credits obtained by the bank itself, and the one it pays on deposits. Exceptions are possible only in cases when an operation will not result in losses to the bank.

A bank has the right to extend unsecured loans on condition that economic norms are complied with.

The granting of non-interest bearing credits is prohibited except in cases specified by the law.

In case of untimely repayment of a credit and interest thereon, the bank shall have the right to issue an order on the forced payment of debt obligations, if this is envisaged by the agreement.

Article 50. Direct Investments by Banks

Banks shall carry out direct investments and operations with securities in conformity with laws of Ukraine on securities and investment activity, and in accordance with NBU regulations.

Banks shall have the right to make investments only on the basis of written permission from the National Bank of Ukraine, which is granted in accordance with the rules set forth in Article 47 of the present Law.

A bank shall have the right to make investments without a written NBU permission in the following cases:

  • An investment in any legal entity amounts to not more than 5% of the bank’s regulatory capital.
  • A legal entity into which an investment is made is engaged exclusively in activities connected with rendering financial services.
  • The bank’s regulatory capital fully complies with NBU regulations on investments.

A procedure for informing on investment, stipulated in part 3 of this Article, shall be established by the National Bank of Ukraine.

It is prohibited for banks to invest funds into an enterprise or institution whose statute stipulates full liability of its owners.

A direct or indirect participation of a bank in the capital of any enterprise or institution shall not exceed 15% of the bank’s capital. Total investments of a bank shall not exceed 60% of its own capital.

These restrictions shall not apply to:

  • Shares and other securities acquired by the bank to realize the right of collateral holder and are not held by a bank for more than one year.
  • Shares issued by one bank and acquired by another bank in order to create a financial holding group.
  • Securities owned by the bank for not more than one year, and obtained them as a result of underwriting.
  • Shares and other securities acquired by the bank at the expense and on behalf of its clients.

The requirements set forth in Part 2 and 6 do not apply to the activity of investment banks.

Article 51. Bank Settlement Operations

In order to perform banking activity, banks shall open and service correspondent accounts with the National Bank of Ukraine, other banks in Ukraine and abroad, as well as banking accounts for legal entities and individuals in Hryvnias and foreign currency.

Bank settlements shall be carried out in the cash and “cashless” form in accordance with rules and regulations established by the NBU regulations.

“Cashless” settlements shall be carried out on the basis of settlement documents in paper and electronic form.

As payment instruments, banks in Ukraine may use payment orders, payment requests, requests-order, veksels, checks, banking payment cards and other debit and credit payment instruments, which are used in international banking practice.

Payment instruments should be properly prepared and contain data on the issuer, payment system where they are used, legal grounds for the settlement operation and, as a rule, a holder of the payment instrument and fund recipient, value date, and other information necessary for effecting the settlement by the bank in full conformity with instructions of an account owner or other initiator of the settlement operation stipulated by law.

In the course of the settlement operation, the bank shall check the accuracy and formal adequacy of the document.

Article 52. Agreements with Related Parties

Agreements concluded with related parties of the bank can not provide for more favorable terms than agreements concluded with other persons. Agreements concluded between a bank and related parties, if they contain more favorable conditions, shall be declared invalid by the court since the moment of their conclusion.

For the purposes of this Law, related parties shall be:

  • Bank managers.
  • Holders of essential participation in the bank.
  • Close relatives, spouses, children, parents of any persons, specified in Items 1) and 2).
  • Affiliated persons of the bank, managers and holders of essential participation in such affiliated persons, as well as their close relatives.

Conditions considered more favorable shall be:

  • Acceptance of collateral that is of a lower value, than that required from other clients.
  • Purchase of low-quality property or property at a higher price from a related party.
  • Making an investment into securities of a related party that the bank would not have invested in another institution.
  • Payment for goods or services from a related party at a price higher than usual, or under circumstances when the same goods or services would have never been procured from another party.

A bank can conclude agreements with related parties, which provide for interest rates and commission fees for banking operations, which are lower than usual, and interest rates on deposits, which are higher than usual if the bank’s net profit allows this without harming the bank’s financial development.

It is prohibited for a bank to extend credit to any person with the purpose of: repaying obligations of this person to a related party of the bank; acquiring assets of a bank’s related party; acquiring securities, placed or underwritten by a bank’s related party, with the exception of goods manufactured by this person.

By issuing its order, the National Bank of Ukraine can impose restrictions on the amount of agreements with related parties.

Article 53. Ensuring Competition in the Banking System

It is prohibited for banks to conclude agreements to limit competition and monopolize crediting terms, other banking services, and the establishment of interest rates and commission fees.

It is prohibited for the bank to set interest rates and commission fees lower than the cost of services in this bank.

It is prohibited for the bank to take any other actions for the implementation of unfair competition in its practice.

Instances of unfair competition in rendering any banking services or conducting operations shall be grounds for prohibiting this bank from further providing such services or performing operations.

Article 54. Credibility of Advertising

Banks are prohibited from distributing any form of advertising that contains untrue information on their activity in the sphere of banking services.

The National Bank of Ukraine has the right to apply enforcement actions to banks and other persons violating requirements of this Article.

Chapter 9. Bank Relations with Clients

Article 55. Regulation of Bank Relations with Clients

Relations between a bank and its clients are regulated by the legislation of Ukraine, NBU regulations and agreements (contracts) between clients and the bank.

A bank shall make every effort to avoid conflicts of interest of bank employees and clients, and conflicts of interest of bank clients.

Banks are prohibited from demanding that clients acquire any product or service from the bank or from a bank’s affiliate or related party as a mandatory condition to render banking services.

Article 56. Right of Clients to Information

A client shall have the right to have access to information on bank’s activities. Banks shall provide the following information upon the request of clients:

  • Data, which are subject to mandatory disclosure, on financial indicators of the bank’s activities and its economic position.
  • The list of bank managers and its separated subdivisions, as well as legal entities and individuals, which hold an essential participation in the bank.
  • The list of services provided by the bank.
  • The price of banking services.
  • Other information and consultations pertaining to the provision of banking services.

Article 57. Insurance of Individual Deposits

Deposits of individuals in commercial banks shall be guaranteed in accordance with a procedure foreseen by the legislation of Ukraine.

Deposits of individuals in the State Savings Bank shall be guaranteed by the State.

Article 58. Bank’s Liability for its Obligations

A bank shall be liable for its obligations with all its assets in accordance with the legislation of Ukraine.

A bank shall not be held responsible for non-fulfillment or untimely fulfillment of its obligations in case of a moratorium to satisfy claims of creditors, suspension of settlement operations, arrest of bank’s own funds on its accounts by authorized bodies of the state power.

Bank participants shall be liable for the bank‘s obligations in accordance with law of Ukraine and the Statute of the bank.

Article 59. Arrest, Suspension of Operations with Accounts and Exaction

Property and other funds of a bank, placed in its accounts, as well as funds and other valuables of legal entities and individuals, placed with a bank, may be arrested only upon an order of the investigator, sanctioned by the prosecutor, or an order of the State executor in cases stipulated by law of Ukraine, or by a court decisions.

Property may be released from arrest only by an order of a body that took a decision to impose arrest or by a court decision.

Disbursement of funds from bank own accounts, as well as disbursement of funds from accounts of legal entities and individuals that are bank clients, may be suspended by state bodies authorized in conformity with the legislation of Ukraine and exclusively in cases stipulated by the laws of Ukraine.

It is prohibited to arrest correspondent accounts of a bank or suspend transactions at these accounts.

Transactions at accounts may be resumed by the body, which took a decision to suspend them, or by a court decision.

Exaction of own funds of a bank, money and other valuables of legal entities and individuals kept in the bank is exercised only in compliance with executive documents stipulated by the laws of Ukraine.

A decision of the court on exaction of funds placed in accounts of legal entities or individuals, the expenditure operations with respect to which were suspended by an authorized body, shall be executed immediately and unconditionally, with the exception of cases when a moratorium is imposed in accordance with this Law.

Chapter 10. Banking Secrecy and Confidentiality of Information

Article 60. Banking Secrecy

Information on activities and financial position of a client, that became known to the bank in the course of servicing the client and maintaining client relations, or to third parties through the rendering of banking services, and the disclosure of which can inflict material or moral damage to the client, shall be banking secrecy.

In particular, banking secrecy include:

  • Information on clients’ accounts, including correspondent accounts of banks with the National Bank of Ukraine.
  • Operations effected in favor or upon instructions of a client, and contracts executed by the client.
  • Financial and economic position of clients.
  • Security systems of the bank and clients.
  • Information on organizational and legal structure of corporate clients (legal entities), their managers and areas of activities.
  • Information on client’s commercial activities or commercial secrecy, any project, inventions, product samples, and other commercial information.
  • Information on the reporting on a specific bank, with the exception of publicly disclosed information.
  • Codes used by banks to protect information.

Information on banks or clients, which is collected in the process of bank supervision, constitutes banking secrecy.

Provisions of this Article do not cover general information on banks, subject to publication. A list of information subject to mandatory publication shall be defined by the National Bank of Ukraine and additionally by a bank itself upon its discretion.

Article 61. Obligations as to Protecting the Banking Secrecy

Banks shall ensure the protection of banking secrecy by means of:

  • Limiting the number of persons who have access to information that constitutes banking secrecy.
  • Organizing a special handling and processing of documents containing banking secrets.
  • Using technical means to prevent unauthorized access to electronic and other information carriers.
  • Application of precautions aimed at protecting banking secrecy and exercising responsibility for its disclosure in agreements and contracts concluded between the bank and its client.

When hired, bank employees shall sign a commitment to keep banking secrets confidential. Managers and employees of banks shall not disclose confidential information which became known to them during the performance of their official duties, or use it for their own benefit or for the benefit of any third party.

Private individuals or organizations, which, in performing their functions or rendering services to a bank, directly or indirectly obtained confidential information, shall not disclose such information or use it for their own benefit or for the benefit of a third party.

If losses are inflicted on the bank or on its clients due to the leak of information on the bank or its clients from the bodies authorized to exercise banking supervision functions, the bodies guilty of such disclosure shall reimburse these losses.

Article 62. Procedure for Disclosing Banking Secrets

Information on legal entities and individuals, which constitutes banking secrets, shall be disclosed by banks:

  • in response to a letter of inquiry or by written permission of the owner of such information;
  • in response to a written order of the court or by the court decision;
  • to bodies of the Office of Public Prosecutor of Ukraine, the Security Service of Ukraine, Ministry of Internal Affairs of Ukraine, and Antimonopoly Committee of Ukraine – in response to their written request concerning operations on accounts of a particular legal entity or an individual entrepreneur for a specified period of time;

    (paragraph 3, Part I, Article 62 with the amendments

    in compliance with the Law of Ukraine of

    November 20, 2003, No. 1294-IV)

  • to bodies of the State Tax Service of Ukraine – in response to their written order on issues of taxation or currency control, with regard to operations at accounts of a particular legal entity or an individual entrepreneur for a specified period of time;
  • to the specially authorized executive body on financial monitoring at its written request regarding the fulfillment of financial operations subject to financial monitoring under the legislation on prevention and counteraction of legalization (laundering) of proceeds from crime.

    (Part I, Article 62 is supplemented with paragraph 5

    in compliance with the Law of Ukraine of

    November 28, 2002, No. 249-IV)

  • to state executive bodies at their written request on fulfilling the court judgements regarding the state of accounts of a particular legal person or natural person – an individual entrepreneur.

(Part I, Article 62 is supplemented with paragraph 6 in

compliance with the Law of Ukraine of May 22, 2003, No. 835-IV)

A request of a relevant state agency for obtaining information which contains banking secrets shall:

  • be presented on a letterhead of the established form of a state body;
  • be signed by a manager (or deputy manager) of a state body and sealed with an official stamp;
  • contain reasons stipulated by this Law to obtain such information;
  • carry references to the provisions of the Law, in accordance with which the state body has the right to obtain such information.

A bank shall issue statements of accounts (deposits) in the event of death of their owners to persons specified by the owner of the account (deposit) in his/her bequest for the bank, to state notary offices or private notaries, and foreign consulate offices on inheritance issues on accounts (deposits) of deceased owners of accounts (deposits).

A bank is prohibited from providing information on clients of another bank, even if their names are mentioned in documents, agreements and operations of the client.

A bank shall have the right to provide general information, which constitutes banking secret, to other banks within the limits required to grant credits and bank guarantees.

Restrictions with regard to obtaining information containing banking secrets, which are stipulated by this article, shall not apply to employees of the National Bank of Ukraine or persons authorized by them, who, within the powers provided by the Law of Ukraine “On the National Bank of Ukraine,” perform functions of banking supervision or foreign exchange control.

In accordance with an international treaty, which the Verkhovna Rada of Ukraine agreed to recognize as mandatory, or under the principle of reciprocity, the National Bank of Ukraine has the right to provide information on a bank to a banking supervision agency of another country if:

  • It does not violate state interests and banking secrecy.
  • There are guarantees that the information obtained will be used exclusively for bank supervision purposes.
  • There are guarantees that the information obtained will not be disclosed outside the bank supervision agency.

Provisions of this Article do not apply to the cases when banks inform, in compliance with the legislation, of the dubious operations and of other cases stipulated by the law to the specially authorized executive body on financial monitoring.

(Part 8 of Article 62 with changes made according to Law of Ukraine

of 28.11.2002, N 249-I)

Persons found guilty of violating the procedure for disclosing and using banking secrets, shall bear responsibility in accordance with law of Ukraine.

Chapter 11. Prevention and Counteraction of Legalization (Laundering) of the Proceeds from Crime

Article 63. Prevention of Legalization (Laundering) of the Proceeds from Crime

Banks are obliged to develop, implement and regularly renew the rules of internal financial monitoring and the program of its fulfillment taking into account the requirements of the legislation on prevention of legalization (laundering) of the proceeds from crime.

The National Bank of Ukraine when supervising the banks’ activities at least once a year conducts checking the banks as to their compliance with the legislation regulating the relations in the sphere of preventing the legalization (laundering) of the proceeds from crime.

Article 64. Obligations as regards the identification of clients

Banks are prohibited to open and keep anonymous (numbered) accounts.

Banks are prohibited to enter into contractual relations with clients – legal or physical persons in case of arising some doubts as regards the authenticity of their names.

In compliance with the law of Ukraine the bank is obliged to identify:

Clients, who open accounts with the bank;

Clients, who fulfil operations subject to financial monitoring;

clients, who perform operations in cash without opening the account for the amount exceeding an equivalent of 50,000 hryvnias;

persons authorized to act on behalf of specified clients.

Accounts for clients will be opened and specified operations will be carried out only after identifying the clients and taking the measures under the legislation regulating relations in the sphere of preventing the legalization (laundering) of the proceeds from crime.

The bank has the right to demand, and the client is obliged to give documents and information required for identification of his/her person, essence of activity and his/her financial status. Should the client fail to present the necessary documents or information or present deliberately untruthful information about himself/ herself, the bank shall refuse to serve the client. If during identification any reasonable suspicions arise as regards presenting by the client the inauthentic information or intentional presenting the information aimed at misleading, the bank is to give information about financial operations of the client to the specially authorized body of executive power in charge of financial monitoring.

For identification of a client – a legal person the bank is to identify physical persons who are the proprietors of this legal person, have direct or indirect influence on it and derive economic benefit from its activity. If a legal entity is an economic company, the bank is to identify physical persons who have majority interest in this legal entity. A client is to give the information stipulated by the legislation, which the bank needs with the purpose of implementing the requirements of legislation regulating relations in the sphere of preventing the legalization (laundering) of the proceeds from crime. Failing such information, the account will not be opened, and if any accounts were opened previously, the bank will refuse to perform services. For identification and taking measures, which are sufficient, in the bank’s opinion, to confirm the identity of the client – legal person – and to ensure the possibility for the bank to fulfil the rules of internal financial monitoring and the program of its fulfillment, including the disclosure of doubtful financial operations, the bank has the right to demand the information stipulated by the legislation, as regards the identification of this person and his/ her leaders, from bodies of the state power, who carry out supervision and/or control of the activities of this legal person, banks, other legal persons, as well as to put the measures stipulated by the law into effect as regards collection of such information from other sources. The above mentioned bodies of the state power, banks, other legal persons are obliged within ten working days from the day of receiving the inquiry, to give the following information to the bank free of charge.

For identification of a client – a physical person and taking measures, which are sufficient, in the bank’s opinion, to confirm his/ her person, the bank has the right to demand the information concerning identification of this person, from bodies of the state power, banks, other legal persons, as well as to put the measures into effect as regards collecting such information about this person, which is necessary for implementing the rules of internal financial monitoring and programs of its fulfillment, including the disclosure of doubtful financial operations. The above mentioned bodies of the state power, banks, other legal persons are obliged during ten working days from the day of receiving the request, to give the following information to the bank free of charge.

Identification of the bank’s client is not obligatory during fulfilling each operation, if the client was previously identified according to the requirements of the legislation regulating relations in the sphere of preventing the legalization (laundering) of the proceeds from crime.

With the availability of the decision of the authorized state body on abolition of state registration of a legal person or state registration of economic entity – a physical person, acknowledgement in accordance with established procedure of a legal person as fictitious, or announcement of a physical person as deceased or missing, the bank will close the account of such person and give urgent information to the specially authorized body of executive power in charge of financial monitoring as regards such account and will not transfer or otherwise use the money on this account until receiving the orders of the above body. Failing during seven working days the above orders or the judgement as regards taking the measures on this money, the bank will decide as regards these matters in compliance with the legislation of Ukraine.

Article 65. Keeping the documents

All documents on fulfillment of financial operations, subject to financial monitoring, and the results of identification of persons, who performed such operations, should be kept by the bank during five years from the day of performing such operations.

Results of identification of the account’s holder and the person authorized to act on his/ her behalf, shall be kept by the bank during five years after closing this account”.

(Chapter 11 in the wording of the Law

of Ukraine of 06.02.2003, N 485-IV)

Part IV. Banking Activity Regulation.

Banking Supervision

Chapter 12. Authority of the National Bank of Ukraine as to Banking Activity Regulation and Banking Supervision

Article 66. Forms of Banking Activity Regulation

State regulation of banking activity shall be performed by the National Bank of Ukraine in the following forms:

Administrative regulation.

  • Registration of banks and licensing of their activity.
  • Establishment of requirements and limitations for activity of the banks.
  • Enforcement of administrative or financial sanctions.
  • Supervision over activity of banks.
  • Recommendations in respect to activity of the banks.

Indicative regulation.

  • Setting the mandatory economic norms.
  • Determination of mandatory reserve norms for banks.
  • Defining deductions to provisions against risks from active banking operations.
  • Defining interest rate policy.
  • Refinancing of banks.
  • Correspondent relations.
  • Management of gold and currency reserves, including currency interventions.
  • Operations with securities in the open market.
  • Import and export of capital.

Article 67. Purpose, Organization, Grounds and Scope of the Supervision

The purpose of banking supervision is to ensure stability of the banking system and to protect interests of depositors and creditors of the bank as to the safekeeping of client funds on banking accounts.

Supervisory activity of the National Bank of Ukraine covers all banks, their subdivisions, affiliated and related parties of banks in the territory of Ukraine and abroad, offices of foreign banks in Ukraine, as well as other legal entities and individuals in their compliance with requirements of this Law as to performing banking activity.

In the course of banking supervision, the National Bank of Ukraine has the right to require that the banks and managers thereof eliminate banking legislation violations, fulfill NBU normative-legal acts to avoid or to overcome undesirable consequences, which could jeopardize the safety of funds, entrusted to these banks or inflict damage on a proper banking activity.

In the course of banking supervision, the National Bank of Ukraine may use the services of other institutions under separate agreements.

In case the banking license is revoked, the National Bank of Ukraine informs relevant bodies of other countries, where this bank had branches or correspondent and other accounts.

The National Bank of Ukraine shall carry out banking supervision on an individual and consolidated basis and apply enforcement measures for violation of the banking activity legislation requirements.

In case the National Bank of Ukraine considers issues of enforcement measures application to a specific bank, the Chairman of the Board (Board of Directors) or Chairman of the Supervisory Council of this bank shall be invited to give explanations. An exception is the cases of appointment of a provisional administrator or revoking of bank license and appointment of a liquidator.

During supervision over the institutions, which carry out banking activity in other countries, the National Bank of Ukraine co-operates with relevant bodies of those countries. Notification sent by the relevant bodies of other countries, can only be used for the following purposes:

To check a license of an institution for carrying out activity.

To check the right for carrying out banking activity.

Chapter 13. Accounting, Reporting and Auditing

Article 68. General Principles of Accounting and Reporting in the Banks

The banks shall organize accounting in accordance with the internal accounting policy, developed on the basis of the rules and regulations established by the NBU in accordance with International Accounting Standards and regulations (standards) of Ukraine.

The accounting shall ensure a timely and full reflection of all the banking operations and provide true information to users on the status of assets and liabilities, financial performance and changes therein.

The financial statements of every bank shall show the results of its activity for the reporting period.

Article 69. Reporting of Banks

A bank is obliged to submit to the National Bank of Ukraine its financial statements and statistical reporting on its activity, operations, liquidity, solvency, profitability as well as the information on its affiliated persons with the aim to assess the bank’s financial position.

The National Bank of Ukraine has the right to request consolidated statements from banks.

The National Bank of Ukraine shall establish the following for the banks:

  • Reporting forms and methodology for their preparation.
  • Frequency and time frame for submission of reports.
  • Structure of explanatory notes.
  • Minimum information subject to publication and time limits for its submission.
  • Methods for the preparation of consolidated statements.

The National Bank of Ukraine has the right in certain cases to require the submission of one-time and interim reports.

Each holder of the essential participation in the bank, who is a legal entity, shall submit an annual report to the National Bank of Ukraine within the defined term on its activity. The report should contain the following information:

  • Type of activity carried out by a legal entity.
  • Information. on economic entities, in which this legal entity’s participation exceeds 10 percent, in particular: the name and address of the legal entity, size of the stake owned by this person, and type of activity.
  • Balance sheet and income statement of that entity at the end of the last fiscal year.

The National Bank of Ukraine has the right to request the submission of other periodical reports or information from the bank’s essential participation holder in order to supervise the security and stability of the bank’s financial position and to ensure adherence to the provisions of this Law.

The fiscal year of the bank is a calendar year beginning on January 1st.

Financial statements of banks to be submitted to the National Bank of Ukraine must be audited annually. The audit of a bank is to be performed by an auditor that has a certificate of the National Bank of Ukraine to audit banking institutions.

The auditor’s report shall contain the following:

  • Bank balance sheet.
  • Profit and loss account.
  • Statement of movement of capital.
  • Schedule on assets and liabilities maturity.
  • Information on the adequacy of bank reserves and capital.
  • Information on the adequacy of accounting, internal audit and bank’s control mechanisms.
  • An opinion whether the submitted financial statements reflect the bank’s real financial position.

Article 70. Publication of the Financial Statement

The bank shall publish its quarterly balance sheets and an income statement in “The Uriadoviy kurier” or “Holos Ukrainy” during the month preceding the reporting quarter.

The Bank shall publish its annual financial statements confirmed by auditors before June 1, of the year following the reporting year in the newspapers “The Uriadoviy kurier” or “Holos Ukrainy”.

Chapter 14. Bank Inspections

Article 71. Bank Inspections

Every bank shall be subject to on-site inspections by inspectors of the National Bank of Ukraine or by auditors appointed by the National Bank of Ukraine.

Inspections shall be performed with the purpose of identifying the level of safety and stability of the bank’s operations, reliability of the bank’s reporting and compliance with the Ukrainian legislation on banks and banking, and the National Bank of Ukraine normative-legal acts.

Inspection shall be performed in accordance with the plan, approved by the National Bank of Ukraine. The planned examination shall be conducted not more than once a year. The NBU shall inform the bank about conducting a planned inspection not later than in ten days prior to its beginning. .

Banks shall ensure free access to all the documents and information, observing the rules set in this Article, to the National Bank of Ukraine inspectors and other persons authorised by the latter, and during the on-site examination – the possibility of free access to all the premises during the working hours.

The management of the bank shall appoint a competent official to supply the inspectors with the required documents and explanations, and provide the representatives of the National Bank of Ukraine Banks Supervision Service with an office space for work.

The National Bank of Ukraine can take a decision to perform an extraordinary examination of the bank if sound grounds for doing so exist. Such a decision shall be signed by the National Bank of Ukraine Chairman or by the person, authorised by the Chairman.

When exercising its supervisory authority, the National Bank of Ukraine has the right to obtain from banks, free-of-charge, the information about their activity, as well as explanations on separate issues of the bank’s activity.

If the inspection materials contain no data on the breach of the legislation, they cannot be transferred for the verification to third parties.

In the course of inspections of banks, the National Bank of Ukraine has the authority to inspect any reporting of any affiliate of the bank, for the purpose of determining the effect of such relationship on the bank position. For inspection purposes, affiliates shall facilitate the National Bank efforts in line with this Article and in the same manner as applied to the banks, by way of rendering assistance and co-operation as must be provided by banks under this Article.

Article 72. Examinations and Inspections of Persons Subject to the National Bank of Ukraine Supervision

The National Bank of Ukraine has the right to inspect persons subject to bank the National Bank of Ukraine supervision in order to check for the compliance with the legislation on banking activity. In the course of these inspections, the National Bank of Ukraine has the right to demand any information from these persons needed for the inspection. The persons being inspected shall submit to the National Bank of Ukraine the required information within the period of time defined by the National Bank of Ukraine.

The persons that can be subject to inspection by the National Bank of Ukraine include:

  • A holder of an essential participation in a bank, if the National Bank of Ukraine believes, that this person (entity) does not meet the requirements set forth in this Law as for the essential participation holding or negatively effects the bank’s financial stability and security.
  • A person who acquired an essential participation without the National Bank of Ukraine written permission.

A person (entity) in respect of which there is information that he/it conducted or conducts banking activity without a license may also be subject to the National Bank of Ukraine inspection.

Article 73. Enforcement Measures

In case a bank or other persons (entities) under the National Bank of Ukraine supervision in compliance with this Law, violate the banking legislation of Ukraine, any normative-legal act of the National Bank of Ukraine, or perform risky operations, which threaten the interests of the bank’s depositors or other creditors, the National Bank of Ukraine has the right to use the adequate enforcement measures, including:

  • A written warning requiring the termination of such violations, and adoption of measures to correct the situation; reduction of the bank’s expenses; limitation of unwarranted high interest payments on the attracted funds; reduction or alienation of inefficient investment.
  • Convention of the general shareholder meeting, a meeting of the Board (Board of Directors) of the bank to agree on the action plan for a bank’s financial rehabilitation or a reorganisation plan
  • A written agreement with the bank under which the bank or the bank-authorised person assumes an obligation to redress violations, improve the financial condition of the bank, etc.:
  • Issuance of the instructions concerning the:
    • Suspension of the payment of dividends or the distribution of the capital in any other form.
    • Imposition of increased individual economic norms;
    • Increase in the loan loss provisions and allowances for other assets
    • Limitation, termination or suspension of some high risk operations performed by the bank;
    • Imposing a ban on the provision of unsecured loans
    • Imposition of fines on:

      Bank directors in amount up to one hundred untaxed minimal incomes of citizens;

      Banks under the Regulations approved by the National Bank of Ukraine Board but not more than 1 percent of the registered statutory fund.

    • Temporary prohibition for the essential participation holder to use of his/her voting rights in case he/she seriously or repeatedly violated requirements of this Law or the National Bank of Ukraine normative-legal acts.
    • Temporary removal of a bank’s official from his/her office and prohibition to hold any position in case of serious or repeated violation of requirements of this Law or of the National Bank of Ukraine normative-legal acts.
    • Bank reorganisation
    • Appointment of the provisional administration.

In the event of the violation of this Law or the National Bank of Ukraine regulations that caused a significant loss of assets or income and brought about the insolvency of a bank, the National Bank of Ukraine shall have the right to revoke the bank’s license and initiate bank liquidation procedures under the present Law.

If any official person or a holder of an essential participation or a representative of the legal entity, which holds an essential participation, have been accused of committing a crime, but the corpus delicti has not been proven, and only a minor infringement on this Law or the National Bank of Ukraine Regulations has been found to occur, or if this person is found guilty of any such criminal offence without an imprisonment, the National Bank of Ukraine has the right to issue an order discharging that person from his/her position with the bank or prohibit the exercise of his/her voting rights in the bank.

A person discharged from office or temporarily stripped of the voting rights in the bank pursuant to the National Bank decision can be acquitted or his voting right renewed only subject to the prior permission of the National Bank of Ukraine.

The resolution of the National Bank of Ukraine on the appointment of a provisional administration is an executive document.

Article 74. Procedure for Enforcement Measures and Sanctions in Case of Violation of the Banking Legislation

Fines shall be imposed on bank management and officials, individuals holding an essential participation pursuant to the procedure envisaged by the Code of Ukraine on Administrative Offences.

The effective laws of Ukraine and regulations of the National Bank of Ukraine determine procedures for application of enforcement measures and the size of financial sanctions applied to banks and other legal entities subject to supervisory activities of the National Bank of Ukraine

Part V. Provisional Administration and Liquidation of Banks

Chapter 16. Provisional Administration

Article 75. Appointment of a Provisional Administration

The National Bank of Ukraine is obliged to appoint a provisional administration in the event of a considerable threat to a bank’s solvency.

The National Bank of Ukraine has the right to appoint a provisional administration to a bank in the following cases:

  • Systematic violations by the bank of legal requirements stipulated by the National Bank of Ukraine.
  • Decrease in a bank regulatory capital by 30% within the last 6 month with simultaneous violation of at least one economic norm.
  • Failure to honour a bank within 15 working days at least 10 per cent of its overdue liabilities.
  • Arrest or indictment of bank managers because of criminal actions.
  • Concealing by a bank of accounts, any assets, registers, reports or documents.
  • Unjustified refusal of a bank to provide documents or information related to activities thereof to the authorised representatives of the National Bank of Ukraine.
  • Existence of public conflict in the bank management.
  • The filing of a bank’s petition for appointment of a provisional administration.

The provisional administration shall assume its duties immediately after a decision has been on its appointment.

The official appointed by the National Bank of Ukraine shall head the provisional administration.

The provisional administration’ term in office cannot exceed one year since its appointment.

The National Bank of Ukraine shall have the right to prolong the mandate of the provisional administration for system-forming banks for the period of up to a year.

Article 76. Requirements to be Met by a Provisional Administrator and Conditions of His/her Appointment

A provisional administration functions are performed by persons appointed by the National Bank of Ukraine..

The provisional administrator there may be:

  • a legal entity, which performs professional activity as for provisional administration and liquidation of the bank, rendering of the audit, legal or consulting services and has not less than 3 employees possessing the National Bank of Ukraine certificate granting it the right to exercise the provisional administration of a bank and liquidation of a bank;
  • an independent expert (under the contract);
  • an employee of the National Bank of Ukraine.

Only the persons, who have the National Bank of Ukraine certificate granting them the right to exercise the provisional administration and liquidation of a bank with high professional and moral qualities, impeccable business reputation, economic or legal education and experience, necessary for fulfilment of the provisional administration function might participate in the provisional administration.

At any moment of time the National Bank of Ukraine has the right to assume control over the provisional administrator’s activities, to dismiss the provisional administrator from his position in case the provisional administrator’s performance does not comply with the requirements established by this Law.

The provisional administrator’s work and work of the specialists, involved by him/her in order to ensure the fulfilment of his/her authorities is paid for every month of work in accordance with the contracts signed with them.

Work of a provisional administrator and of the attracted specialists is paid at the expense of the bank he/she has been appointed to.

Provisional administrator’s remuneration should not be lower than the average monthly salary of the Board (Board of Directors) Chairman of this bank for the 12-month period prior to appointment of the provisional administration.

The provisional administrator within the approved cost estimate for provisional administration expenses shall determine the level of compensation of the attracted experts approved by the National Bank of Ukraine.

Additional reward to the provisional administrator and specialists might be established within the cast estimate under the National Bank of Ukraine approval.

A person cannot be appointed the provisional administrator of a bank if he or she is:

  • A creditor, related party or shareholder of the bank.
  • A person who was convicted, and the sentence was not served or cancelled in line with a legal procedure, or who is accused in a criminal case
  • A person who failed to meet obligations to any bank.

In order to reveal the conflict of interests, before being appointed a provisional administrator, the candidate shall convey to the National Bank of Ukraine the information about his personal and business interests, in particular, on:

  • The debt to the bank, labour relations with it or ownership of the property rights of the bank.
  • Relationship, during the previous five years, with any bank as its related party.
  • Failure to meet any obligations concerning any bank during the last five years.
  • Ownership of property competing with the property of the bank.
  • Other interests that can impede unbiased performance of his functions as a provisional administrator.
  • Information proving the absence of conflict of interests with the National Bank of Ukraine.

Before appointing a provisional administrator, the National Bank of Ukraine must ensure that there is no conflict of interests.

In case a conflict of interests arises after a provisional administrator is appointed, he/she must take actions to eliminate the conflict of interests and simultaneously inform thereon the National Bank of Ukraine which is to decide whether the provisional administrator can continue his/her work.

A provisional administrator shall not have the right:

  • To perform his/her functions in case of a conflict of interests, except for the cases when the National Bank of Ukraine is aware of it and allowed him to continue the work.
  • To accept any services, presents and other valuables, directly or indirectly, from persons interested in taking any actions related to the appointment of the provisional administration.
  • To use or allow to use the property that the provisional administrator has the right to control, in his/her interests or in the interests of third parties.
  • To extend promises or commit oneself on behalf of the National Bank of Ukraine without its written authorisation.
  • To disclose the banking secret or other official information, if it is not related to performing the functions of the provisional administrator.

Failure to fulfil or improper fulfilment of the provisional administrator’s functions in accordance with this Law, which have inflicted losses to the creditors or the bank might be a ground for termination of his/her duties and deprivation him/her of a certificate on providing of provisional administration and liquidation of a bank.

In case a provisional administrator due to his/her activity or lack thereof inflicted the losses, a bank and/or creditors have a right to file a suit on compensation.

Article 77. Insurance of the Responsibility, Life and Health of the Provisional Administrator

Financial responsibility, life and health of the provisional administrator should be insured in accordance with the contract on provisional administration under the effective legislation of Ukraine.

Article 78. Consequences of the Provisional Administrator Appointment

Starting from the day a provisional administrator is appointed, the powers of the general shareholders’ meeting, Supervisory Board and Board (Board of Directors) of the bank are suspended and transferred to the provisional administrator. Contracts, concluded by the bank’s managers after appointment of the provisional administration are invalid from the moment of their signing.

Article 79. Notice on Appointment of the Provisional Administrator

Within three days after the provisional administrator is appointed, the National Bank of Ukraine shall publish the information thereon in the newspaper “The Uriadoviy kurier” or “Holos Ukrainy”.

The National Bank of Ukraine shall send to the bank’s head office and to every territorial sub-division of the bank its decision on appointment of a provisional administration specifying the date, when the provisional administration started.

Article 80. Rights and Responsibilities of the Provisional Administrator

Immediately following his appointment, the provisional administrator shall ensure safekeeping of the bank’s assets and documentation as well as assets and documentation of the affiliated persons, where the bank holds more than 50%.

Within one month from the moment of his/her appointment, the provisional administrator is obliged to take the stock of the bank’s assets and liabilities and prepare a balance sheet.

From the day the provisional administrator is appointed he/she has a full and exclusive right to manage and control the bank, and to take any actions aimed at restoring the bank to satisfactory financial position of the bank, or if possible, to prepare the bank for sale, reorganisation or liquidation in order to protect the interests of depositors or other creditors.

In particular the provisional administrator has the right:

  • To continue or stop any operations of the bank.
  • To perform any operations on behalf of the bank.
  • To terminate any contracts to which the bank had been a party that are, in the judgement of the provisional administrator, no longer necessary or loss-making to the bank.
  • To bring actions to the court institutions on property rights.
  • To apply to the court institutions for taking a decision according to which a debtor of the bank shall convey information about its assets.
  • To attract to the work on provisional administration any employee, expert, consultant as well as to entrust the managers with taking actions in respect of giving the necessary assistance to the provisional administration. The provisional administrator has the right to remove such persons any time from fulfilment of their duties.
  • To dismiss or reassign any of the bank’s managers or employees, or reassign their responsibilities, and change their salaries under the effective legislation of Ukraine.
  • To suspend the bank’s capital allocation or payment of dividends in any form.
  • To sell such assets and return such liabilities of the bank as may be necessary to sell or return maintain or increase the solvency of the bank.
  • Under the National Bank of Ukraine approval, to arrange for the sale or reorganisation of the bank.

The provisional administrator must receive authorisation from the National Bank of Ukraine to sell the bank’s assets whose book value exceeds the level set by the National Bank of Ukraine.

In performing his duties, the provisional administrator in terms of his/her status is equal to the representative of the NBU. Any person who deliberately impedes the provisional administrator’s access to the bank, its assets, books, records, or documents shall be held responsible under the legislation. The law enforcement authorities shall assist the provisional administrator in his/her work upon his/her written request.

Article 81. Prevention of Transfer of the Bank Assets before the Provisional Administrator Is Appointed

A provisional administrator can apply to the court with a request to recognise a contract invalid if:

  • any payment or property transaction for the purpose of granting a privilege to an individual creditor of the bank (within 6 months prior to the appointment of the provisional administrator);
  • any transaction with a related party of the bank, if such a transaction does not meet the requirements of current legislation of Ukraine or threatens a bank’s depositors or other creditors (within 1 year prior to the appointment of the provisional administrator);
  • any business transaction in which the payment made by the bank substantially exceeded the real value of the goods, services, or other assets received by the bank (within 3 years prior to the appointment of the provisional administrator);
  • any gratuitous transaction performed within 3 years prior to the appointment of the provisional administrator;
  • any action performed with the intention to withhold assets from creditors of the bank, or otherwise to impair their rights, within 3 years prior to the appointment of the provisional administrator;
  • any transaction based on a fraudulent or forged document.

A provisional administrator does not pay the state duty when applying to the court or court of Arbitration.

Article 82. Continuous Provision of Services

A lessor of bank premises or provider of utility services, communication services does not have the right from the provisional administrator’s appointment day, to refuse such a service because of the appointment of the provisional administrator or because the bank has failed to pay for such services.

Article 83. Reports of the Provisional Administrator

Within one month from the moment of his/her appointment, a provisional administrator should submit a written preliminary report to the NBU.

The report should reflect the bank’s financial position (balance sheet, income statement, disclosure of some balance sheet items), likelihood of the bank’s rehabilitation and its value estimates in case of liquidation. The report also must include the following:

  • General information on the bank’s compliance with the requirements of this Law, the normative-legal acts of the National Bank of Ukraine and a recommendation in respect of termination of the provisional administration and restoration of the powers of the general meeting of shareholders, Supervisory Council of the bank and the Board (Board of Directors) of the bank.
  • A detailed action plan aimed at the stabilisation of the bank’s operations, and bringing the bank to compliance with the requirements stipulated by this Law and the normative-legal acts of the National Bank of Ukraine.
  • A general plan for the sale of the bank, or any part of its assets and property in order to meet the liabilities.
  • Recommendations for reorganisation of the bank or revoking its banking license and liquidation.

The provisional administrator shall submit periodic reports to the National Bank of Ukraine on his/her activity, within the timeframe determined by the National Bank of Ukraine.

Article 84. Decision of the National Bank of Ukraine as to the Provisional Administrator’s Reporting

Within two weeks after receipt of the report from the provisional administrator, the National Bank of Ukraine shall make a decision whether to accept the provisional administrator’s recommendation for the bank.

In case the National Bank of Ukraine agrees with the provisional administrator’s recommendations concerning financial rehabilitation, sale or reorganisation of a bank, the decision is taken to implement the provisional administrator’s plan.

The National Bank of Ukraine must revoke the banking license of the bank and effect the liquidation of the bank, if it determines that the bank cannot be brought into the legal and financial compliance with the requirements of this Law and the National Bank of Ukraine regulatory acts within one year. With respect to the systemic banks, the National Bank of Ukraine may prolong this period up to 2 years.

The National Bank of Ukraine has the right to amend the provisional administrator’s plan, prior to or during the implementation thereof.

The National Bank of Ukraine also has the right to terminate the plan, revoke the banking license of the bank, and order the liquidation of the bank at any time if it determines that successful implementation of the plan is no longer instrumental to the rehabilitation of a bank..

Article 85. Moratorium

In order to create favourable conditions for the recovery of the bank’s financial position, which would be compliant with the established requirements, the National Bank of Ukraine has the right to introduce a moratorium on the creditors’ claims satisfaction for the provisional administration period not to exceed 6 months.

A moratorium on the creditors’ claims satisfaction shall cover the liabilities, which have fallen due before the appointment of the provisional administration.

While the moratorium is in effect:

  • It is prohibited to perform exaction under the executive and other documents, under which the exaction is performed in accordance with the legislation of Ukraine.
  • The forfeit (fine or penalties), other financial (economic) sanctions for a failure to fulfil or improper fulfilment of the monetary and tax obligations and charges are not accrued.

The moratorium does not apply to servicing of the current operations, performed by the provisional administrator, to the salary or alimony requests, claims for compensation of the damage inflicted on the health and life of individuals, author’s fee, as well as covering of the creditors’ claims, which have arisen from the bank’s liabilities originated during the provisional administration.

After the expiration of the moratorium, the forfeit (interest or penalties) as well as amount of the losses inflicted, that a bank should have paid to the creditors under the monetary and tax obligations, may be claimed in amounts, which existed as of the date, when a moratorium was introduced unless otherwise provided for by this Law.

Article 86. Cessation of Provisional Administration Activities

Provisional administration of a bank ceases if:

  • The completion of the term of the provisional administrator’s assignment.
  • The revocation of the banking license of the bank and the decision to appoint a liquidator for the bank.
  • Reorganisation of the bank in accordance with Chapter 5 of the present Law.
  • The removal of the provisional administrator by the National Bank of Ukraine decision.

Chapter 17. Liquidation of Banks

Article 87. Legal Grounds for Liquidation of Banks

A bank can be liquidated:

  • On the basis of the bank’s owners’ decision
  • Pursuant to the decision of the National Bank of Ukraine / including the one based on the creditors’ application.

Liquidation on the initiative of the bank’s owners occurs in accordance with the Law on businesses, taking into consideration specific aspects envisaged by this Law and with the consent of the National Bank of Ukraine.

Liquidation of a bank on the NBU initiative is performed in line with this Law and normative-legal acts of the NBU.

The National Bank of Ukraine is obliged within two days after adopting the decision on bank liquidation to inform about it the Fund of guaranteeing the natural persons’ deposits.

(Article 87 is supplemented with Part 4 in compliance with

the Law of Ukraine of September 20, 2001, No. 2740-III)

In case of juridical appeal of the National Bank’s decision on the bank liquidation the National Bank of Ukraine informs about it the Fund of guaranteeing the natural persons’ deposits.

(Article 87 is supplemented with Part 5 in compliance with

the Law of Ukraine of September 20, 2001, No. 2740-III)

Article 88. Peculiarities of Bank Liquidation in the Event of its Insolvency

The following entities have the right to go to the court with the application on recognizing a bank insolvent and on its liquidation:

  • Bank creditors
  • The National Bank of Ukraine

Persons mentioned in Item 1, Part 1 of this Article, shall send a letter of credence to the National Bank of Ukraine with the application on bank liquidation if there are signs that it is insolvent. To this application they shall attach documentary evidence that the bank has outstanding money obligations to them. If during a month since the filing of the application, these persons failed to obtain a response from the National Bank of Ukraine, they shall have the right to institute court proceedings as to the recognition of the bank as insolvent.

When the court examines the insolvency case, it shall apply the legislation of Ukraine on restoring debtor’s solvency or recognizing the debtor bankrupt to the extent that does not contradict the norms of this Law.

In the course of case preparation for the hearing, a judge shall obtain a validated opinion of the National Bank as to the expediency bank liquidation or a decision of the National Bank of Ukraine to revoke the banking license and to appoint a liquidator. The National Bank of Ukraine shall submit one of these documents to the court within a month since receiving the court’s inquiry.

The negative opinion of the National Bank of Ukraine as to the practicality of revoking the bank license constitutes the grounds for leaving the application without a consideration.

If the debtor bank is unable to meet its liabilities in keeping with the court ruling on the compulsory exaction during six months and if during this period no agreement is reached as to foregoing debt rescheduling, the National Bank of Ukraine shall revoke the banking license and initiate bank liquidation procedures.

The case on recognizing a bank insolvent pursuant to the application of persons mentioned in Part 1 of the present Article can be initiated only upon the revocation of the banking license.

Following license revocation, no sanation of the insolvent bank shall be allowed.

An agency that initiated the liquidation decision shall appoint a liquidator. The liquidator shall commence his/its activities immediately after the license revocation.

Within a month since the court has accepted the case for examination the court shall make a final decision on the bank liquidation lawsuit. The only issue that shall be taken into consideration by the court in the bank liquidation case shall be he opinion of the National Bank of Ukraine about the practicality of bank liquidation and whether the application of liquidation procedures by the National Bank of Ukraine comply with the requirements of this Law.

In its decision, the court decision shall confirm a candidate liquidator or appoint the liquidator that meets the requirements of the present Law. The conflict of interests the court has learned about may be the only grounds to decline the candidate liquidator appointed by the National Bank of Ukraine.

Examination of the liquidation case in the court shall not suspend the activity of the liquidator appointed by the National Bank of Ukraine. The bank liquidation procedure shall be completed not later than in 3 years since the revocation of the license.

Article 89. Announcement of the Liquidation

Within a three day period from the moment the National Bank of Ukraine or the bank owner has taken a decision to liquidate the bank, a liquidator shall publish the data on opening the liquidation procedure in the newspapers “The Uriadoviy kurier” or “Holos Ukrainy” at the bank’s expense.

The information on the liquidation procedures initiation should contain the name and other requisites of the bank under liquidation, the date of the National Bank of Ukraine (or the bank owner’s) decision on license revocation or the date of an owner’s decision to liquidate a bank and appointment of the liquidator, data about the liquidator.

Within one month, starting from the moment an announcement on liquidation procedure initiation was made, the creditors have the right to present the liquidator with their claims to the bank.

It is not allowed to publish or otherwise disclose the data on the bank’s insolvency until the decision on the bank’s liquidation is taken.

Persons guilty of divulging this information shall be liable under the effective legislation of Ukraine.

Article 90. Requirements to be Met by the Liquidators and Conditions of the Appointment thereof

A liquidator may be:

  • An individual, who meets the requirements to the provisional administrator set forth in Article 76 of this Law.
  • A legal entity, which performs professional activity as for provisional administration and liquidation of the bank, rendering of the audit, legal or consulting services and has not less than 3 employees possessing the National Bank of Ukraine certificate granting them the right to exercise the provisional administration of a bank and liquidation of a bank.

An individual or a legal entity, who/which performed provisional administrator’s functions in the bank shall not be appointed the liquidator of that bank.

Financial responsibility, life and health of the liquidator should be insured in accordance with the legislation of Ukraine, regulations of the National Bank of Ukraine, and the bank liquidation contract under the legislation of Ukraine.

Article 91. Consequences of Appointment of the Liquidator

Starting from the day when decision was made on revoking a license and the appointment of a liquidator:

  • The powers of the general meeting, Supervisory Council, the Board (Board of Directors), and of the provisional administrator, who transfers all the documentation to the liquidator of the bank, shall be terminated.
  • Bank’s activity is wound up by completion of the technological cycle of specific operations in case it will assist in maintenance and growth of the liquidation mass.
  • All the bank’s monetary obligations and obligations as to the payment of taxes and duties (mandatory payments) are deemed due.
  • The accrual of the interest payments, forfeit (fines or penalties) and of other economic sanctions in respect of all types of the bank’s indebtedness is terminated.
  • The data on the bank’s financial position is no longer considered to be confidential or constituting a banking secret.
  • Conclusion of the agreements in respect of alienation of the bank’s property or its transfer to the third parties is permitted under the procedure, stipulated in this Law.
  • The arrest of the bank’s property or other limitations as for this property’s disposal is lifted. Imposing of the new arrests or other limitations as for the bankrupt bank’s property disposal is not allowed.
  • Any claims in respect of the bank’s commitments arising in the course of the liquidation are laid only within the limits of liquidation procedure.

Article 92. Powers of the Liquidator in Implementation of Liquidation Procedures

From the date of his/her appointment, the liquidator shall:

  • Take the bank’s property under his/her jurisdiction, adopt measures ensuring the safekeeping thereof.
  • Perform bank property management and administration functions.
  • Perform the stock-taking and appraisal of the bank property in keeping with the effective legislation.
  • Perform functions of the bank management bodies.
  • Head the liquidation committee and form the liquidation mass.
  • Lay claims to the third parties concerning repayment of the bank’s accounts receivable, including exaction thereof through court;
  • iHave the right to obtain a credit in order to pay severance payments to the employees, who are dismissed due to the bank’s liquidation. This credit is repaid with priority in accordance with Article 95 of this Law, from the funds raised through the sale of the bank’s property.
  • From the day when the liquidation procedure was commenced the liquidator shall announce the dismissal of the bank’s employees and perform it in accordance with the Ukrainian labour legislation.
  • Decline the creditors’ claims to the bank in accordance with the prescribed procedure.
  • Announce the refusal to fulfill bank’s contracts and their termination them in accordance with procedures, prescribed by this Law.
  • Take actions to locate and recover the bank’s property held by third parties.
  • According to the existing procedure, transfer the documents of the bank subject to mandatory safekeeping in accordance with legal and regulatory documents, to the place of safekeeping.
  • Take actions, which, in his/her opinion, will provide an opportunity to get, within the shortest possible period of time, maximum proceeds from the short-notice disposal of the assets.
  • Sell the bank’s property in order to cover the claims, which are included into the Register of the creditors’ claims.
  • Inform (within a ten day period from the moment an appropriate decision was taken) a state bankruptcy agency about his/her appointment and provide information to be included into the consolidated database on the bankrupt enterprises.
  • Exercise other powers, stipulated by this Law.

From the moment of his appointment, a liquidator shall acquire the rights of manager (management bodies) of the bank. Within 3 days since the appointment of the liquidator, the bank’s management bodies shall ensure the transfer of all the accounting and other bank’s documentation, seals and stamps, tangible and other assets to the liquidator. In case they seek to evade the fulfilment of the above mentioned duties, the management bodies, including separate managers thereof shall bear responsibility in accordance with the effective legislation of Ukraine.

In performing his duties, the liquidator under his/her status shall be equal to the representative of the National Bank of Ukraine. Any person who deliberately impedes the liquidator’s access to the bank, its assets, books, records, or papers are criminally or administratively liable in accordance with legislation. The law enforcement authorities are obliged to assist the liquidator in his/her work upon his/her written request.

Article 93. Preparation Measures to Satisfy Creditors’ Claims

After one-month period following publication of the announcement of the liquidation procedure, the liquidator shall stop accepting the creditors’ claims.

Within three months from the date indicated in the notification on liquidation, the liquidator shall take the following actions to satisfy the claims by the creditors:

  • Determine the amount of debt payable to each creditor and classify it according to the priority of repayment.
  • Decline the claims in case they are not confirmed
  • in compliance with the requirements of the normative and legal acts of the Fund of guaranteeing the natural persons’ deposits he will give to the Fund within twenty working days from the day when deposits become unavailable the complete list of depositors having the right of reimbursement of funds under deposits with determined amount subject to reimbursement;

    (Paragraph 3, Part 2, Article 93 in the edition of the Law of Ukraine

    of September 20, 2001, No. 2740-III)

  • Make the list of the claims accepted by him/her to be approved by the National Bank of Ukraine.
  • Notify the creditors on the acceptance of their claims.
  • Publish an announcement, each week within three weeks, indicating the day and place where the list of claims is available for examination and the date of its submission to the National Bank of Ukraine.

Creditors have a right to send to a liquidator their objections to the claims accepted by him/her within one month after the notification has been received.

The liquidator has the right, with the National Bank of Ukraine approval, to repay the claims to a bank after the priority list is finalised and approved by the National Bank of Ukraine, only in respect of the contracts, which ensure performance of the liquidation procedure.

The liquidator shall, within 2 month period following his/her appointment, inform all clients of the bank, who/which use the custody services that they need to remove their valuables within a 3 month period from the date of the liquidation procedure announcement.

The valuables, which were in custody with the bank and which were not taken by their owners within the indicated time limit are considered to be the funds which shall not be claimed by the bank creditors. These valuables are transferred to the National Bank of Ukraine for return to their legal owners.

Article 94. Appraisal of the Bank’s Property

The liquidator in accordance with the procedure stipulated by the Ukrainian legislation shall appraise the property under the liquidation procedure. For the property to be auctioned off, this appraised value is an initial price.

In order to appraise the property the liquidator has the right to involve experts on a contractual basis. Their services are paid for at the expense of the liquidation mass, unless otherwise established by the National Bank of Ukraine.

Article 95. Property Sale

After the stock-taking and the property appraisal, the liquidator shall start the sale of property at the open auction, unless the National Bank of Ukraine establishes a different procedure for its sale.

The liquidator shall announce through the mass media the procedure for the property sale, composition thereof, conditions and timeframe for its acquisition. The procedure shall be agreed upon with the National Bank of Ukraine.

In case there are two or more bids for the purchase of the bank property, the liquidator shall hold a tender (an auction). The tender (auction) procedure is established by the legislation of Ukraine.

The bank’s property with controlled circulation is sold at the closed auction. Only persons, who are authorised by law to hold such property or possess other appropriate property rights, may participate in the closed auction.

Assumption of the bank’s claims is regulated by civil legislation of Ukraine.

The liquidator has the right to offer for an auction the securities and bank’s claims, unless a different procedure of sale (assumption) of the bank’s claims is set by the National Bank of Ukraine.

Article 96. Priority of Meeting the Claims to the Bank

Funds, which were received from liquidation procedure, are channelled to meet the creditors’ claims in the following sequence:

  • Satisfied in the first place shall be:
    • collateralised claims;
    • Deposit Insurance Fund claims that arose in connection with the payment by the Fund of amounts stipulated by the legislation on deposit insurance;
    • severance payment to the dismissed bank employees, including repayment of the credit, obtained for this purpose;
    • expenses related to the liquidator’s work, including:expenses related to the payment of state duty;expenses for the publication of the liquidation announcement;expenses for the mass-media publication of information concerning a bank’s property sale procedure;
      expenses of the liquidator related to holding and maintenance of the bank’s assets;audit expenses;labor remuneration of the employees who were involved by the liquidator to perform the liquidation.
    • Obligations that emerged due to the impairment of citizens’ health and life.
  • The above mentioned expenses are compensated after realisation of a part of the liquidation mass, unless otherwise stipulated by this Law.

  • Secondly, there are satisfied individual depositors claims, which exceed the amount, stipulated by the individual deposit insurance system, claims arising from the bank’s liabilities to its employees, claims related to the damage, committed to the health and life of the individuals.
  • Thirdly, other claims shall be satisfied.

Claims of every following priority are satisfied, when the funds from selling of the bank’s property are available, and after the full satisfaction of the previous priority claims.

In case the funds are not sufficient for the full satisfaction of the claims of one priority, the claims are satisfied in proportion to the amount of claims of each creditor in the queue.

In case a creditor refuses to get satisfaction of the legally recognised claim, the liquidator does not consider the amount of this creditor’s monetary claim.

Claims, placed after the deadline, shall not be considered and shall be recognised as settled.

Claims, unsatisfied because of lack of property, shall be considered as settled.

In case, when at the moment of the liquidation completion, some of the bank’s assets remain unsold and their immediate selling would result in an essential loss of their value, the liquidator shall transfer these assets to administration of the legal entity, defined by the National Bank of Ukraine, which is obliged to take actions, directed at continuation of the creditors’ claims’ satisfaction at the expense of the received assets.

Property, left after satisfaction of the creditors’ claims is transferred to the owners and property of state banks, to the relevant privatisation body for its further sale. Funds, obtained from this property sale are channelled to the State Budget of Ukraine.

Property of cooperative banks remaining after the satisfaction of creditor requirements shall be used under the legislation of Ukraine on the cooperation.

Article 97. Remuneration of Persons Involved in the Liquidation

Payment for the work of persons involved in assisting the liquidator shall be done in accordance with the procedure, established by this Law for the provisional administrator and specialists hired by him/her, and must not be lower than the payment for the work of the bank’s employees for rendering similar services taking into account scope and complexity of work.

Article 98. Completion of the Liquidation

The liquidation of the bank shall be considered complete and the bank shall be considered liquidated when the relevant entry has been made to the Register of banks upon approval of the liquidator’s report.

Part VI. Challenging the National Bank of Ukraine Decisions

Article 99. Challenging the National Bank of Ukraine Decisions

Bank or other persons under the National Bank of Ukraine authority, have the right, according to the procedure specified by the law, to challenge in court or court of arbitration the decisions or actions of the National Bank of Ukraine or its employee, provisional administrator or liquidator, as well as the actions or inaction of provisional administrators or liquidators.

Decisions on the appointment of the provisional administrator or liquidator can be challenged in the court in the absence of grounds stipulated by this Law.

Filing the complaint shall not terminate the execution of the challenged decisions or actions.

In the course of any judicial case examination, initiated as a result or in connection with the application of this Law against the National Bank of Ukraine or its employee, provisional administrator or liquidator, the provisional administrator, liquidator or expert, appointed to provide assistance to the provisional administrator or liquidator, shall be responsible for damage caused by his activity or inactivity, in accordance with terms of reference or in the course of its fulfilment within the framework of a bank’s provisional administration or liquidation, in case such activity or inactivity were intentional.

Damage, caused as a result of provisional administrator’s or liquidator’s professional mistake, is compensated under the effective legislation of Ukraine, the National Bank of Ukraine regulations, and financial risk insurance contracts

Challenges or subsequent claims or some other challenge-related judicial review shall not terminate the provisional administration process, bank liquidation or other challenged measures and decisions.

Part VII. Final Provisions

  • The present Law shall come into effect since the date of its publication.

    The National Bank of Ukraine shall have the right to set transitional terms for the fulfillment of norms provided for by this Law. If this allows banks to comply with the requirements of this Law, these terms shall not exceed general deadlines envisaged by the present Law requirements.

    Banks created during the period prior the effectiveness date of this Law shall, within two years, bring their activities in compliance with this Law.

    Within a year since effectiveness date of the present Law, the National Bank of Ukraine shall re-issue licenses to banks in line with the classification of operations provided for by this Law.

    Provisions of the present Law shall apply to bank creation procedures, the granting of a license to perform bank operations initiated and not completed prior to the entry into effect of this Law.

    A bank liquidation procedure initiated before effectiveness date of the present Law shall be completed pursuant to the rules set by this Law and normative-legal acts of the National Bank of Ukraine adopted in accordance with this Law.

  • Before legislation is brought in compliance with this Law, laws and other normative-legal acts shall be applied to the extent that does not contradict this Law.
  • Within six month since the publication of this Law, the Cabinet of Ministers of Ukraine and the National Bank of Ukraine shall:
    • Prepare and submit to the Verkhovna Rada of Ukraine their proposals in respect of bringing laws of Ukraine in compliance with this Law;
    • Bring their normative-legal acts in compliance with this Law;
    • Ensure the adoption of regulations needed for the implementation of this Law;
    • Ensure that the ministries and other central executive power bodies bring their normative-legal acts in compliance with this Law.
  • The following documents shall be declared null and void:

    The Law of Ukraine “On the banks and banking” (Vidomosti Verkhovnoi Rady URSR, 1991, No 25 p. 281; Vidomosti Verkhovnoi Rady Ukrainy, 1992 p., #20, p. 276, # 47, p. 644, # 48, p. 656; 1993, # 10, p. 76, # 11, p. 83, # 19, p. 209,# 24, p. 272, # 26, p. 277, # 29, p. 307, p. 308; 1994, # 12, p. 60, # 27, p. 222; 1995, # 14, p. 90, p. 93, # 21, p. 154; 1996, # 3, p. 11, # 7, p. 28; 1997, # 3, p. 7, # 4, p.24, # 8, p. 63; 1998, # 10, p. 36, # 14, p. 61, # 26, p. 149; 1999, # 37, p. 334; 2000, # 35, p. 282;

    Item 11, Part I of the Law of Ukraine “On Amending Individual; Legislative Acts of Ukraine in Connection with the Adoption of the Laws of Ukraine “On the State Civil Executive Service” and “On the Enforcement Procedures” of October 19, 2000, # 2056-III;

    Article 62 of the Law of Ukraine “On the National Bank of Ukraine” (Vidomosti Verkhovnoi Rady Ukrainy, 1999, # 29, p. 238; 2000, # 42, p. 351);

    Resolution of the Verkhovna Rada of Ukraine “On the Procedure to Enact the Law of Ukraine “On Banks and Banking” (Vidomosti Verkhovnoi Rady URSR, 1991, # 25, p. 282; Vidomosti Verkhovnoi Rady Ukrainy, 1994, # 52, p. 467).