On 14 March 2016, Governor of the National Bank of
Ukraine, Ms Valeria Gontareva, held a monthly meeting with top
managers of Ukraine’s 40 largest banks.
NBU representatives at the meeting also
included NBU Deputy Governors Vladyslav Rashkovan, Kateryna Rozhkova, Dmytro Sologub, Yakiv Smolii,
and Oleh Churii.
“The financial market is more or less stable. We
hope that the political situation in Ukraine will stabilize this week. The
Government, whether reshuffled or not, will continue its work and we will be
able to resume cooperation with the International Monetary Fund,” said Ms Gontareva,
opening her speech.
The NBU Governor briefed the bankers about FX
market liberalization measures undertaken by the regulator in early March to
ease the rules for individuals. In particular, the NBU has
increased the amount of FX cash or investment metals that banks’ customers are
allowed to withdraw from their accounts per day from an equivalent of UAH
20,000 to UAH 50,000. The regulator has also raised the amount of domestic
currency cash that banks are allowed to disburse to their customers
per day from an equivalent of UAH 300,000 to UAH 500,000.
Additionally, the
maximum amount of FX cash that banks are allowed to sell to an
individual per day has been increased from an equivalent of UAH 3,000 to UAH
6,000. “If Ukraine had not delayed the resumption of cooperation with the IMF,
we would have been able to move ahead with FX market liberalization measures,”
saidMs Gontareva and invited the bankers attending the meeting to
participate in the discussion.
The CEOs of largest banks welcomed FX market
liberalization measures undertaken by the NBU. According to them, the easing of
restrictions has in no way led to the withdrawal of household deposits or
spurred the increase in demand for foreign currency, nor has it triggered FX
buying spree. The NBU Governor pointed out the NBU's management team
anticipated such response from the market when taking a decision to ease FX
restrictions. In their turn, the bankers expressed their readiness for further
measures to ease FX restrictions should current economic and
financial market conditions remain in place.
NBU Deputy Governor, Mr Churii, briefed
the bankers about the latest key measures undertaken by the regulator to
streamline instruments used for managing liquidity in the banking system in an
effort to ensure the efficiency of an inflation-targeting regime. In
particular, the regulator has abolished the requirement limiting the amount of
refinancing loans that banks were allowed to obtain from the NBU to
the amount of not more than 50% of their regulatory capital and of not more
than 50% of the total loan amount offered to banks through liquidity-providing
tenders.
From now on, the refinancing opportunities offered to banks will
only be limited by the available collateral (domestic sovereign bonds,
certificates of deposit, and foreign currency) and the total loan amount
offered through liquidity-providing tenders. Additionally, the NBU has provided
banks with an opportunity to use a rollover mechanism allowing the NBU to grant
a loan to the bank against the collateral of domestic sovereign bonds or
certificates of deposit to enable the latter to repay refinancing and overnight
loans. Such mechanism will be available to banks from 4 April 2016.
Mr Churii also unveiled the NBU’s plans
to introduce a new liquidity providing instrument known as Emergency Liquidity
Assistance (ELA) to replace stabilization loans. This
instrument is a revolving short-term lending facility that will be available to
banks facing deposit outflows. The NBU Board has already approved the ELA
concept, and this instrument is currently being implemented.
NBU Governor, Ms Rozhkova, pointed out
that the NBU is currently finalizing a regulation on credit risks.
“At the end of next week a draft regulation will be
proposed for discussion with banks and the Independent Association of Ukrainian
banks and in April the NBU is set to approve it at the NBU Board
meeting. This being said, this regulation should enter
into force at latest on 1 September 2016. The core principles and approaches have
already been formulated. They have not undergone substantial changes. We seek to
provide additional clarity to some provisions to close all loopholes,”
underlined Ms Rozhkova.
She also reminded the bankers that efforts are
under way to make a credit registry fully operational.
According to her, a meeting with representatives from banks and banking
associations has been scheduled for 18 March 2016 to discuss the
registry. We plan to finalize changes by making amendments to Draftlaw No.
3111 in April.
Commenting on the progress in diagnostic studies of
the banking sector, Ms Rozhkova pointed out that “the
NBU has approved recapitalization plans for the top 10 banks. The
next 10 largest banks are required to submit their recapitalization plans by
the end of March. These recapitalization planswill be approved in April.
NBU Deputy Governor, Mr Rashkovan,
reminded the bankers that more than 20 draft laws critical for moving forward
financial sector reforms are pending approval in Parliament.
“We expect Parliament to hold a financial day on
Thursday. 10 financial draft laws, including draft laws on the protection of
creditors' and financial services consumers' rights rights,
financial restructuring and the operation of the National Commission
for the State Regulation of Financial Services Markets and the National
Securities and Stock Market Commission, will be debated in
parliament. We hope that these draft laws designed to
drive recovery in lending will be adopted,” said Mr Rashkovan. The
NBU is also working on legislative proposals to simplify the consolidation of
the banking sector (merger procedures for banks) based on the anti-crisis law
on the increase in capitalization, which is already in
effect”.
Mr Rashkovan underlined that the NBU is
developing a fruitful dialogue with all the public authorities. The NBU has
recently held a meeting with senior executives of the Anti-Monopoly Committee
of Ukraine.
“The meeting was constructive: we have agreed to
expand cooperation on issues related to competition in the banking sector and
the Committee backed our proposals to simplify merger procedures for banks,”
said Mr Rashkovan.
He also briefed the bankers about the NBU’s efforts
to implement the Cashless economy project intended to reduce the demand for
cash and increase cashless payments, including through the expansion of the
network of POS terminals. The Cashless economy project will be implemented in
Ukraine as part of the USAID-supported Program designed to raise the level of financial
literacy among the general public, promote cashless payments and develop the
skills required to use them.
NBU Deputy Governor, Mr Yakiv Smolii,
briefed the bankers about the outcome of his visit to Tehran (the Islamic
Republic of Iran) as part of the Ukrainian delegation and reassured the banking
community that Iranian businesses show high interest in
forging cooperation with Ukraine.
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