Following initiative by Ministry of Finance, Government adopts decree to ensure social welfare payments and salaries for public employees

1/25/16

The Cabinet of Ministers has adopted amendments to the Decree «On the improvement of the mechanisms for the transfer of salaries to public employees and social welfare payments» setting more rigid criteria for the authorized banks and updating the list of such banks.

The adopted amendments shall increase effectiveness and transparency in the selection of banks which can serve the public sector. They are also aimed to improve protection for payments to public employees and social welfare payments. With this purpose, the Cabinet of Ministers, in accordance with the proposal of the Ministry of Finance, sets tighter selection criteria for the authorized banks enabling only the most reliable banks to qualify.

The below criteria were added to the list of requirements for the banks authorized to serve public institutions:
- the share of the assets of the respective bank in the total assets of the Ukrainian banking system should be not lower than 1.0%;
- the bank should own domestic public bonds equal to at least 20% of its regulative capital;
- the bank should have at least three years of operation experience in Ukraine at the time of the bid contest;
- the bank has not been subject to restrictions, termination or suspension of its operations imposed by the National Bank of Ukraine for the last three months prior to submitting the bid documents to the permanent contest commission;
- the bank has been complying with the economic indicators set by the National Bank of Ukraine for the last three months prior to submitting the bid documents;
- the bank is a member of the State Deposit Funds, except for cases stipulated by law, and does not have debts to the State Deposit Funds related to charges, fines and penalties;
- the bank does not have pending taxes and fees to pay;
- neither Ukraine, nor other member states of the OECD, nor the EU have imposed sanctions against the bank or its owners or affiliated persons for the last 12 months prior to submitting the bid documents.

A clear and exhaustive list of the criteria for the selection of the authorized banks also reduces opportunities for biased approach in the selection process. Being aware of the criteria, every bank can make a conclusion itself, if it can qualify to cooperate with the public sector.

The above Decree stipulates that banks will have three months to make themselves fit for the new criteria. The respective ministries, agencies and other central and local bodies of executive powers receive one more month to switch their accounts to the authorized banks which comply with the new criteria.

One year after the enactment of the Decree one more criterion will enter into force which is the number of payment cards issued by banks in the state multi-issuer payment system (at least 10% of the total number of payment cards issued by the respective bank).

You can mark the parts of text you like, which will be available at the link in the address bar of your browser

You can mark the parts of text you like, which will be available at the link in the address bar of your browser