Particularly, in order to enhance the protection of individual deposits, the Ministry together with the National Bank and international financial organizations developed the Law on DGF which was approved by the Verkhovna Rada. This Law significantly simplifies and accelerates the process of returning deposits as well as limits the abuse and introduces criminal liability for the bank owners and related entities.
“On behalf of the Ukrainian people I would like to express my sincere gratitude to KfW and the Government of Germany for their support. This agreement will give an opportunity to millions of ordinary citizens to receive their deposits from problematic banks within the state guaranteed limit and will also contribute to the recovery of the banking system of our country” Minister of Finance Natalie Jaresko said during the signing of the Agreement.
“These are decisive days and weeks for Ukraine on its path towards a more stable political and economic future which will give the people of the country real prospects. Ukraine deserves a real chance to implement the necessary far-reaching reforms. This requires strong political will in Kyiv, but also active and lasting help from the international community. Germany is supporting Ukrainian reform efforts and it’s political and economic stabilization. The loan agreement signed today is an important contribution to rebuilding and stabilizing Ukraine and an expression of Germany’s solidarity with Ukraine and its people. It supplements Germany’s contribution to EU, IMF and other multilateral funds as well as our bilateral financial and technical assistance to Ukraine” commented Ambassador of Germany to Ukraine Christof Weil.
“By providing the loan for Deposit guarantee fund, KfW makes an important contribution to the restoration of confidence of Ukrainian depositors in the Ukrainian banking system, thus significantly supporting the stability of the financial system of Ukraine” said Roland Siller, Member of the Management Committee of the German state bank KfW.
The loan is issued under the close cooperation of KfW with the World Bank. This means that receiving these funds became possible due to Ukraine’s implementation of a number of important reforms under the framework of the World Bank’s Development Policy Loan ІІ. As a result the Law on DGF was adopted. The providing of this loan to Ukraine symbolizes the quality of the Ukrainian Government’s reforms.
KfW is a German state bank which was established in 1948 and today is one of the most prominent development banks in the world. During the period from 2002 till 2014 Ukraine received from KfW approximately 270 million Euro (193 million Euro from the federal budget and approximately 76 million Euro of KfW’s own funds) for projects on the development of the financial system, electricity supply, municipal water supply and sewerage, social infrastructure in communities as well as on environmental protection.
Key facts on the Credit:
- Interest rate is less than 2.6%
- Credit is provided for 15 years
- Grace period – first 5 years
- Payments will occur twice a year.On 3 September, Minister of Finance of Ukraine Natalie Jaresko and Roland Ziller, a member of the Management Committee of the German state bank KfW, signed an agreement providing Ukraine with €200 Million EUR loan. This loan will be guaranteed by the Government of Germany. This money will support the Deposit guarantee fund (DGF) which is responsible for returning deposits of Ukrainian citizens from bankrupt banks, and the withdrawal of such institutions from the market. The DGF will work together with the Ministry of Finance and the National Bank of Ukraine. This measure will help improve confidence in Ukraine's banking sector.