Revocation of the National Bank of Ukraine Licenses: Recommendations for Businesses

Oleksandr Kamsha, Attorney at Law, Insolvency Receiver, Head of Dnipro Office

Source: Yurydychna Praktyka

The National Bank of Ukraine (NBU or the Regulator) is the main regulator of the banking system and the non-banking financial services market (in particular, insurance). The NBU issues banking and insurance licenses and can revoke them in the event of violations of the law. In the current conditions of martial law, the Regulator has tightened its control; for example, the NBU requires verification of the sources of owners’ funds [1].

Grounds for Revoking NBU Licenses

The Law “On Banks and Banking Activities” lists the cases in which the NBU may revoke a banking license.

According to these provisions of the law, the NBU has the right to revoke a banking license if it finds that:

• inaccurate information was provided in the application forms and documents for obtaining the license;
• no banking operations were carried out during the year after the license was obtained;
• there are systematic violations of the rules on the prevention of money laundering and terrorist financing.

The NBU must also revoke the license at the request of the Deposit Guarantee Fund within five days, but even without such a request, the Regulator may itself initiate the procedure for liquidating the bank [3].

For insurers and other non-bank financial institutions, the main regulatory acts are the Law of Ukraine “On Insurance” and the Law “On Financial Services and State Regulation of Financial Services Markets”. In particular, according to the Law on Insurance, the NBU may revoke an insurance license if the insurer’s ownership structure is not transparent (for example, the beneficial owners are not the actual owners/controllers but persons controlled by them), or if there is inaccurate information in the documents submitted by the insurer to obtain a license [4]. The law also provides for sanctions for other violations, such as repeated violations of regulations (in particular, reserve requirements) [5].

The Law “On Financial Services and Financial Companies” establishes that failure by an insurer to comply with the NBU’s decisions to remedy identified violations of licensing conditions is grounds for revoking the license [6]. Therefore, a company’s refusal to comply with the Regulator’s requirements may serve as grounds for revoking a financial institution’s license.

Businesses must clearly understand which violations can lead to the loss of their license. Typical and common reasons include violations of legislative and regulatory requirements, such as:

• violations of banking legislation. The regulator may revoke a banking institution’s license due to systematic non-compliance with laws, in particular those relating to the prevention of money laundering and terrorist financing;
• the presence of false information. If it is established that a bank or insurer provided forged documents when obtaining a license (for example, false information about capital or ownership structure), the NBU has the right to revoke the license;
• lack of activity. A bank that has not carried out any transactions for more than a year may lose its license if it does not have any real business. The regulator constantly monitors the activities of institutions in order to prevent inactive institutions from existing on the market;
• non-transparent ownership structure. The Law “On Insurance” explicitly establishes the insurer’s ownership structure as grounds for revoking a license if such structure does not meet transparency requirements;
• failure to comply with the regulator’s instructions. The NBU periodically requires financial institutions to eliminate violations identified during inspections (the decision on this is issued by the Committee or the Board of the NBU). If a company ignores the order (does not submit documentation or correct errors), this is a direct ground for revoking the license;
• special requirements during the legal regime of martial law. In the current situation, the NBU has established additional rules (the aforementioned NBU Resolution No. 177), for example, to prove the legality of the origin of authorised capital and owners’ funds. Failure to submit documents or information in accordance with these rules signals to the Regulator the possible existence of violations and may further lead to the revocation of the license.

Appeals Against the NBU’s Revocation of Financial Companies’ Licenses: Case Law

The Unified State Register of Court Decisions (USRCD) contains court decisions in cases where businesses appealed against the NBU’s actions to revoke licenses. Among the most notable cases that have become precedents are the following:

• Joint Stock Company Misto Bank: On 28 July 2025, the Supreme Court finally recognised the NBU’s actions regarding the recognition of the bank as insolvent, the revocation of its license, and its liquidation as lawful [7]. The court overturned the decisions of the lower courts and left the decision to remove Misto Bank from the market unchanged;
• Joint Stock Company Insurance Company Providna: in March 2023, the NBU revoked Providna’s license for failing to comply with the requirements of Resolution No. 177. The company was required to provide documents on the origin of funds, but the insurer failed to do so. As a result, the Supreme Court upheld the legality of the NBU’s decisions to revoke the license and remove Providna from the register [8].

In these examples, the courts confirmed the conclusions of the Regulator, which boiled down to the fact that if legislative violations were identified and the company did not correct them within the prescribed period, the NBU’s actions to revoke the license were lawful.

In the practice of Ilyashev & Partners Law Firm, there is a case in which the firm is assisting an insurance company that has been subject to measures of influence by the Regulator, namely, the revocation of its license to conduct insurance activities. Ilyashev & Partners Law Firm advises the insurance company on the choice of the optimal course of action in relation to the measures applied, the preparation and submission of relevant lawsuits to the court, and applications directly to the Regulator.

The case is currently under active consideration and the firm’s team continues to assist the client at all stages in protecting its rights and interests.

Recommendations for Businesses

To avoid license revocation, owners and managers of banks and insurance companies should adhere to the following principles and recommendations:

• Strictly comply with the requirements of the Law “On Banks and Banking Activities” and the Law “On Insurance”, as well as other relevant laws and regulations of the NBU;
• Ensure a clear shareholder structure, as the NBU takes a strict approach to “nominal” owners/controllers. If the owners are non-residents or have complex corporate structures (chains), prepare documents proving the origin of their funds. Remember that opaque ownership is one of the possible grounds for revoking a license;
• Maintain capital and reserves at the appropriate level. Regularly check that internal standards comply with regulatory requirements (liquidity, reserves, portfolio risk level, etc.). If changes are made to the business model (for example, the performance of bank or insurer contracts requires additional reserves), take this into account in advance in your financial statements. Insufficient capital may be grounds for declaring an institution insolvent and revoking its license;
• If, during supervision, the NBU identifies violations and ordered them to be remedied (administrative orders or decisions of the NBU/Committee), comply with the Regulator’s requirements within the specified timeframe. As evidenced by the cases mentioned in the USRCD, refusal to rectify the violations will result in the revocation of the license;
• Establish timely and reliable communication between the company and the NBU, ensure timely provision of information requested by the Regulator. Keep documents up to date (articles of association, contracts, owners’ resolutions, etc.).

For businesses, it is crucial to identify risks in their activities in a timely manner and eliminate them. Court practice shows that if a company does not comply with Ukrainian laws or NBU regulations/comments, court decisions will be in favour of the Regulator, not the business. Therefore, it is important to keep track of legislative changes and comply with the NBU’s legal requirements, which the Regulator may impose on businesses.

In resolving these issues, it is advisable to consult with lawyers who specialise in disputes related to the NBU’s response measures to banks or insurance companies. In particular, Ilyashev & Partners Law Firm provides legal assistance in matters related to the Regulator’s inspections and in matters related to the results of inspections and the measures applied by the Regulator.

[1] Resolution of the Board of the National Bank of Ukraine No. 177 dated 12 August 2022 “On the specifics of applying registration and licensing procedures for participants in the non-bank financial services market during the period of martial law and amendments to Resolution of the Board of the National Bank of Ukraine No. 39 dated 6 March 2022”: https://zakon.rada.gov.ua/laws/show/v0177500-22#Text

[2] Law of Ukraine “On Banks and Banking Activities” No. 2121-III dated 7 December 2000, Art. 77: https://zakon.rada.gov.ua/laws/show/2121-14#top

[3] Law of Ukraine “On the System of Guaranteeing Deposits of Individuals” No. 4452-VI dated 23 February 2012, Part 3 of Article 44: https://zakon.rada.gov.ua/laws/show/4452-17#Text

[4] Law of Ukraine “On Insurance” No. 1909-IX dated 18 November 2021, Part 2 of Article 123: https://zakon.rada.gov.ua/laws/show/1909-20#top

[5] Law of Ukraine “On Insurance” No. 1909-IX dated 18 November 2021, paragraph 4, part 2, Article 123: https://zakon.rada.gov.ua/laws/show/1909-20#top

[6] Law of Ukraine “On Financial Services and Financial Companies” No. 1953-IX dated 14 December 2021, para. 5, part 1, Article 50: https://zakon.rada.gov.ua/laws/show/1953-20#Text

[7] Resolution of the Administrative Court of Cassation dated 28 July 2025 in case No. 640/7036/21: https://reyestr.court.gov.ua/Review/129135795

[8] Resolution of the Administrative Court of Cassation dated 5 March 2025 in case No. 320/13809/23: https://reyestr.court.gov.ua/Review/125656263