Ministry of Finance welcomes the provision of full access to deposits in “Kyiv Bank” for depositors

6/25/15

The Ministry of Finance welcomes the provision of full access to deposits in “Kyiv Bank” for depositors, made possible through the successful transfer of assets and liabilities of the failing “Kyiv Bank” to a safe state-owned bank “UkrGasBank.” From 25 June all depositors – both physical and legal entities – will have access to their savings.

The Ministry of Finance of Ukraine actively works to provide maximum protection of citizens’ deposits, stabilize the banking system, as well as increase the effectiveness of corporate governance of state-owned banks. In order to improve the protection of deposits and increase the institutional capacity of DGF, the Ministry of Finance has developed a bill – together with the National Bank of Ukraine, Deposit Guarantee Fund (DGF), the World Bank, IMF and EBRD – which has been submitted to the Verkhovna Rada of Ukraine.

This law is important for depositors and for the Ukrainian banking system as a whole, because it improves the protection of citizens' deposits, and provides faster access to these deposits in the event that the bank becomes insolvent and withdraws from the market.

In addition, the Ministry of Finance – with the guidance of state-owned banks, representatives of the National Bank of Ukraine and international financial organizations – is currently developing a strategy for the advancement of state-owned banks. Also, in order to increase the confidence in Ukraine’s banking system amongst depositors, the Ministry – together with the National Bank of Ukraine – has developed a new mechanism for insolvent banks’ withdrawal from the market, which also helps maintain depositors' full access to their savings (and not only within the 200 thousand hryvnias, which is insured by the DGF).

This was made possible after Verkhovna Rada adopted the "On measures to promote the capitalization and restructuring of banks" law following its proposal by the Government of Ukraine on December 2014. Through the adoption of this law, a possibility of alienation of the assets and liabilities of failed banks in favor of another bank has been introduced. This allows the withdrawal of an insolvent bank from the market, and at the same time fully maintains its obligations to the depositors. This was the procedure which the Government of Ukraine decided to enact in February 2015 with regard to the state-owned “Kyiv Bank”, resulting in the transfer its assets and liabilities to a stable state-owned bank “UkrGasBank".

Through the joint efforts of the Government, National Bank of Ukraine, and the Parliament, both physical and legal entities with deposits in the "Kyiv Bank" will be able to freely manage their funds. The Ministry of Finance continues to closely monitor the process in order to ensure proper access of the public to their money.

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