Banks & Banking
Bank & Banking "Bank“ means a legal entity, that has an exclusive right, under the National Bank of Ukraine license, to render the banking services, the data on which have been entered into the State Register of Banks. “Banking activity” means deposit-attraction activity in respect of the funds of individuals and legal entities and allocation of these funds on the bank’s own behalf, terms, and at its own risk, opening and servicing accounts of individuals and legal entities.
Banking license means a document issued by the National Bank of Ukraine pursuant to the procedure and subject to the terms specified hereunder, and on the basis whereof banks and branches of foreign banks are eligible for banking activity. Banking without the banking license is prohibited. “State register of banks” shall mean the register maintained by the National Bank of Ukraine which contains information of state registration of all banks. The legal entity may obtain the status of a bank and rights to engage itself in banking only after receipt of the banking license and entry of the information about this entity into the State Register of Banks.
Banking System of Ukraine The banking system of Ukraine consists of the National Bank of Ukraine and other banks, as well as the branches of foreign banks, which have been established and operate on the territory of Ukraine in compliance with the present Law provisions. The National Bank of Ukraine shall exercise its regulatory and supervisory activities pursuant to the provisions of the Constitution of Ukraine, the present Law, the Law of Ukraine “On the National Bank of Ukraine, ” other legislative acts and its own regulations.
Economic Independence of Banks The State shall not be held responsible for commitments of the banks, and banks shall not be held responsible for commitments of the State, unless otherwise provided for by law or an agreement. The National Bank of Ukraine shall not be held responsible for commitments of the banks, and banks shall not be held responsible for commitments of the National Bank of Ukraine, unless otherwise provided by law or an agreement.
Systemic bank mean a bank with liabilities equal to at least 10 percent of the total liabilities of the banking system.
Types of banks “Bank with foreign capital” shall mean a bank where the share of capital, owned by at least one non-resident, is equal to or exceeds 10 percent. A State bank is a bank in which the State owns 100 percent of the authorized capital. A State bank shall be established pursuant to a decision of the Cabinet of Ministers of Ukraine.
Organizational and Legal Form of a Bank In Ukraine, banks shall be created in the form of • a public corporation (open joint stock company), • a cooperative bank.
Name of the Bank The bank shall have a full and abbreviated official names in Ukrainian and in foreign languages. The bank name shall contain the word “bank”, as well as a reference to the organizational and legal form of the bank.
The bank has the right to perform the banking activities only upon obtaining the banking license by means of rendering the banking services. The banking services include: 1) raising (attraction of) funds and bank metals on deposits; 2) Opening and maintenance of customers’ current (correspondent) accounts including those in bank metals; 3) placing the funds and bank metals attracted on deposits, including on the current accounts, in the bank’s own name, under its own terms and on its own account
“Deposit” shall mean the funds in cash or a non-cash form in the currency of Ukraine or a foreign currency which are placed by clients into their personal accounts according to an agreement with the bank for a specified period of time or without specification of such a period of time, and which are subject to repayment to the depositor under the laws and regulations of Ukraine and terms and conditions of the agreement.
“Bank accounts” shall mean the accounts which show bank’s own funds, claims, commitments of a bank in relation to its clients and counteragents, and which enable transfer of the funds by using the banking payment instruments.
“Bank credit” shall mean any obligation of a bank to extend a certain amount of money, any guarantee, any obligation to acquire the right to claim debt, or any extension of the debt maturity, which occurs in exchange for the borrower’s commitment to repay the debt amount, as well as an obligation to pay interest and other charges due on this amount.
Only banks are entitled to render the banking services. In addition to rendering the financial services any bank is entitled to be engaged in the activities related to: 1) investments; 2) issue of its own securities; 3) issue, sale and drawing of lotteries; 4) custody of valuables and leasing of individual bank safes; 5) transportation of currency valuables and collection of funds; 6) maintenance of registers of registered securities holders (except own shares); 7) provision of consulting and information services with regard to the banking and other financial services.
Lending Operations 1) Performance of operations in the securities market on their own behalf; 2) Granting guarantees, warranties and other liabilities in favour of third persons which envisage their execution in cash; 3) Acquisition of the right to claim the fulfilment of liabilities in the cash form for the delivery of goods and rendering of services, accepting the risk of satisfying these claims and receipt of payments (factoring); 4) Leasing.
“Underwriting” shall mean purchase of securities in the primary market followed by their further resale to investors; concluding an agreement to guarantee full or partial sale of issuer’s securities to investors, their full or partial redemption at a fixed price with subsequent resale, or obligating the buyer to do everything in his/her power to sell as many securities as possible without assuming the obligation to purchase any of the unsold securities.
"Banking payment instrument" shall mean an instrument containing the details identifying its issuer, the payment system, in which it is used and, as a rule, its holder. Relevant documents are formed with the help of banking payment instruments for the transactions performed using the banking payment instruments, on the basis whereof funds are transferred or other services rendered to the holders of such instruments.
Banking settlement operations mean movement of funds on bank accounts which is performed pursuant to client instructions or as a result of the actions, which have led to the legal transfer of assets ownership rights within the scope of law.
Restrictions of Bank Activities Banks shall be prohibited from carrying out activities in the sphere of material production, trade (with the exception of sale of the commemorative, jubilee and investment coins) and insurance, but may act as an insurance intermediary (bankassurance). The specialized banks (with the exception of the savings bank) shall be prohibited from attracting deposits from individuals in amounts exceeding 5% of the bank capital. The bank may own real estate whose total value shall not exceed 25 percent of the bank capital (there are few exceptions).
Economic ratios mean the indicators, established by the National Bank of Ukraine, being mandatory for all banks.
