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Authorized Banks Expand Their Cash Supply Activity in Regions of Ukraine

29 October 2018

Press Release

 

The NBU gradually delegates storing of some of the cash stocks to authorized banks to ensure cash supply in Ukrainian regions.

 

Today, authorized banks partially ensure cash supply in most regions of Ukraine.  In particular, they provide cash to the following oblasts: Vinnytsia, Zhytomyr, Zakarpattia, Ivano-Frankivsk, Kirovohrad, Mykolaiv, Odesa, Poltava, Rivne, Sumy, Ternopil, Kharkiv, Chernihiv, Cherkasy.

 

The authorized banks’ geographical scope will soon be expanded. By the end of 2018, the delegated cash handling model should be functioning in almost all Ukrainian regions.

 

The NBU plans to own only two cash centers, in Kyiv and Lviv, that will ensure storage of banknotes and coins as the reserve funds, cash stocks, and cash to be distributed  to banks, authorized banks and third parties of the cash circulation cycle.

 

The expected results of the project implementation of the delegated cash handling model in Ukraine were discussed during the meeting with representatives of the authorized banks at the NBU on 24 October 2018.

 

Viktor Zaivenko, Director of the NBU Cash Circulation Department, commented on the changes in the country’s cash circulation that took place due to introduction of the delegated cash handling model and involvement of the authorized banks in storing the NBU’s cash stocks, and said the following: “Implementation of the delegated cash handling model in Ukraine will reduce the public cost on cash circulation and booster the development of a competitive market for collection services.”

 

According to him, in January – September 2018, the NBU distributed almost UAH 114.4 billion to banks (including the authorized banks for storing) which was by 11.7% more compared with the same period last year.  During the nine months of 2018, the NBU received over UAH 100.3 billion (of fit and unfit banknotes) which was by 22.6% less compared with the same period in 2017.

 

At the same time, the NBU observes a growth of cash sale and purchase in the interbank market in the current year.

 

Kateryna Soloshenko, Head of Division of Cash Operations, the NBU Cash Circulation Department, informed the audience on the latest amendments to the Regulation on transfer of cash stocks to authorized banks for storing that will soon come into effect. The document has been supplemented with new provisions to expand the powers of authorized banks to manage the regulator’s cash stocks more efficiently.

 

During the meeting, the representatives of the authorized banks also received answers to their practical questions on management of the NBU’s cash stocks held at their banks.

 

Moreover, the representatives of the authorized banks expressed their willingness to expand their presence in the regions of Ukraine.

 

 

For reference.

Since 2016, the NBU has been implementing the Policy on Cash Circulation in Ukraine that provides for a gradual transfer from the current partially controlled model of cash circulation to the delegated model.

 

The delegated cash handling model implies that the NBU moves its cash stocks to the authorized banks for storing to ensure cash supply in regions.

 

In view of the global trends, the transformation processes taking place at the NBU, and the implementation of the Cashless Economy project by the NBU, the delegated cash handling model is appropriate for Ukraine.

 

This model is applied in Brazil, Finland, the Netherlands, Sweden, and the UK.

 

The authorized banks and ultimately also third parties (CIT companies) will perform cash handling functions throughout the regions of Ukraine in compliance with the rules set by the NBU and under its control.

 

The NBU transfers its stocks of banknotes and coins for storing to the authorized banks that comply with certain criteria.

 

At present:

Oschadbank JSC, CB PrivatBank JSC, and Reiffeisen Bank Aval JSC have the status of authorized banks eligible to provide services of storing the NBU’s cash reserves.

The following eight companies have obtained licenses to provide collection services to banks: CIT Security LLC, Ukrainain Service Collection LLC, First Cash-in-Transit Company LLC, O-Mega LLC, Security Firm Ahenstvo Kompleksnoi Bezbeky LLC, Diamant Security LLC, Panorama Prykarpattia LLC, and ComserviceBezpeka PC.

 

 

 


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Last modification   29.10.2018