A new update from the NBU
Given the outcomes from the analysis of operations that were carried out as stipulated by the relevant regulations as well as taking into consideration the recommendations and proposals of the banking and business community, the Board of the National Bank of Ukraine passed Resolution dd. 28.03.2014 № 172 On Regulation on Operations of Financial Institutions and Currency Exchange (hereinafter - Resolution № 172).
This document, in particular, envisages approval of a new set of temporary measures on banking activities and recognition of Resolution №49 as invalid.
A suite of temporary measures specified by Resolution №172 is aimed at backing up the equilibrium in the money and credit markets until the program for cooperation with the international financial organizations is signed. This document stipulates a number of regulatory measures Regulation 49 embraces, inclusive of mitigation of the existing restrictions specified herein, in particular:
- it is stipulated that the procedure for performing the interbank transactions in the currency market of Ukraine will be liberalized. From now on the banks will carry out currency transactions not only as spot, tod or tom trades, but also as swap or forward transactions (all operations involve currency);
- a ban on purchase of foreign currency for further investments overseas by residents and on covering a share of insurance reserves by insurers is annulled;
- the period for making operations involving purchase of foreign currency by the banks on behalf of legal persons , natural persons - entrepreneurs , foreign representation offices is shortened. Starting from March 28, 2014 the funds for acquisition of foreign currency can be transferred not earlier than the third banking day after the date of crediting them to a particular analytical account, while beginning from April 01, 2014 – not earlier than the second banking day after the date of crediting the money to this account. Concurrently, the banks are exempt from the liability to draft and transmit the registers for acquisition of foreign currency to the regional administrations of the NBU;
- the requirement for making cash transactions in the interbank market has been also alleviated. In particular, the procedure for purchase of foreign currency in cash by the bank from natural persons has been simplified, now it is allowable to do a transaction without demanding to present any document certifying the identity, and without making its copy.
Moreover, taking into account the situation in the money and credit markets is rather tough; Resolution №172 introduces some extra measures, namely:
- given a keen demand on foreign currency in cash, the maximum amount of sale to be made by an individual, cannot exceed the equivalent of 15000 hryvnias, during one banking (business) day within one financial institution;
- the restrictions are set on remittance of foreign currency by individuals outside Ukraine, which are related to non-trading transactions involving current currency. The amount of such transactions should not exceed the equivalent totaling 150000 hryvnias a month. Additionally, these restrictions do not apply to a number of socially important remittances, namely: to recover expenses on health care treatment abroad, transportation of patients, conversions made in case of change in the country of residence, or related to the payment for work fulfilled by non-residents of Ukraine, etc.;
- the residents are allowed to pay off their credits, loans (financial support) in foreign currency upon agreements, inclusive of available supplementary agreements concluded with non-residents, but not earlier than the term specified in the agreement;
- the banks are required to suspend an issue of new saving (deposit) certificates within the validity period of Resolution №172, while repayment of certificates issued before should be made solely through transferring the money to the account of the owner or bearer of such certificate .
Resolution №172 takes effect on March 28, 2014 and remains valid till May 1, 2014.
