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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

To Restore Confidence of Depositors

20.03.2015

Oleksandr Vygovskyy, Attorney at Ilyashev & Partners Law Firm
Source: The Yurydychna Praktyka

If investors are not confident that they will get back the money they bring to the bank, it will be impossible to entice them even by the highest deposit rates. Therefore, improvement of individuals’ deposit guarantee system shall be a priority. Due to inflation and devaluation of hryvnia it is necessary to increase the limit amount of compensation on deposits to UAH 500,000. In addition, it is necessary to envisage that restrictions on cash withdrawals in local and foreign currencies shall not apply to return of term deposits by the banks.

Another important factor of increasing confidence in the banking system is strengthening by regulatory authority of control over disclosure of information by banks and ensuring its reliability, as well as monitoring of transactions carried out between banks and related parties (primarily the actual owners of the bank). In this regard, high hopes are put on the recently adopted Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding Liability of Related Parties”. The Law not only expands the list of parties related to the bank and establishes the obligation of banks to provide information about such persons to the NBU, but also entitles the Individuals’ Deposit Guarantee Fund to address the person related to the bank whose actions or inactivity caused damage to the bank, or to the person that received property benefits as a result of the said actions, claiming compensation for damage caused to the bank. Enhancement of liability of bank-related parties will contribute to strengthening the confidence of depositors in the banking system

 
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