On regulation of activities of financial institutions and currency transactions

Dentons, Kyiv, Ukraine, 

Tuesday, June 03, 2014

Resolution No. 328of the Management Board of the National Bank of Ukraine dated 30 May 2014 (the“Resolution”)

The Resolution prolongs the effect of many temporary restrictions on currencyexchange transactions and other transactions in the currency market, alreadyintroduced earlier by the NBU, as well as introduces several new restrictions.

This Resolution was adopted to replace the earlier “anti-crisis” Resolution ofthe NBU No. 245 dated 29 April 2014, as amended, which now expires.

As before, the Resolution sets a ban on pre-repayment of credits and loans in aforeign currency under agreements with non-residents (both the principal amountof the credit/loan and other payments). The Resolution also prolongs therestriction on registration by NBU of amendments to agreements that wouldattempt to reduce repayment terms and duration of borrowings.

In addition, already established restrictions continue to remain in force,namely: on foreign currency transfers abroad made on behalf of privateindividuals and on cash withdrawals made in a foreign currency from current anddeposit accounts of clients through cash-desks and ATMs, limits on sales offoreign currency to private individuals in the cash market, as well as the zerorate for funds reservation under agreements on attraction by the banks of fundsin foreign currency from non-residents.

At the same time the Resolution has expanded the list of exemptions fromrestrictions on foreign currency transfers abroad made on behalf ofindividuals.  The Resolution now also provides that the restrictions donot apply to payments of expenses to foreign courts, investigative, notarialand other competent authorities (including the payment of taxes and othermandatory payments).

The Resolution has also introduced a provision allowing banks, which did notcomply with the requirements on formation and preservation of mandatoryreserves in the relevant accounting period for reservation, to carry out theirown operations on purchase of foreign currency on the interbank currency marketin Ukraine in order to repay deposits to individuals (including interests ondeposits), which become due and payable.  

In addition, the Resolution introduces a new restriction – on cash withdrawalsmade in national currency from current and deposit accounts through cash-desksand ATMs of up to UAH 150,000 per day per client. This restriction doesnot apply to salary payments, business trip expenses, pensions, scholarshipsand other social payments, as well as to cash withdrawals from current anddeposit accounts in cases where they were initially deposited in cash and onlyup to the amounts originally deposited. 

The Resolution is effective as of 1 June 2014 and remains in force until1 September 2014 (except for certain provisions provided for by theResolution).