The Ministry of Finance works actively on the protection of deposits for citizens, banking system recovery and returning credibility to the banks. The Parliament has now adopted the draft law “On changes to the legal acts regarding enhancement of the deposit guarantee system of private persons and failed banks withdrawal out of the market”. This draft law is important for all depositors in Ukraine as well as for the banking system at large as it enhances deposit protection and ensures quick access to the deposits in case of bank failure.
In particular, the draft law that was developed by the Ministry of Finance together with the National Bank of Ukraine, the Deposit Guarantee Fund, the World Bank, the IMF and the European Bank for Reconstruction and Development foresees the following changes:
1. Reducing time for withdrawal of the failed bank from the market (reducing the time from 3 months to 1 month).
2. Implementing the rule regarding depositor’s access to their deposits within 20 days of the bank’s withdrawal date.
3. Higher transparency process regarding bank liquidation.
4. Implementation of the system of qualification for investors in the failed banks in order to omit selling of the banks to insecure persons.
5. Implementation of central auctions for selling banking assets in order to enhance transparency of the auctions.
6. Specification of legal regulations in order to speed up the withdrawal of failed banks from the market.
7. Criteria specification for the failed bank.
8. Restrictions for large depositors to indulge the deposit guarantee system in order to split deposits.
9. Change the order of creditor’s demands, making related party’s lenders last in the line of demands.