National Bank of Ukraine

Ministry of Finance of Ukraine and the National Bank of Ukraine Opt For the Remedial Bank to Cease it Operation
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26 February 2016

Press Release


The National Bank of Ukraine and the Ministry of Finance of Ukraine have resolved that RODOVID BANK JSC, which has been operating in the capacity of a remedial bank, cease its operation. Pursuant to NBU Board Resolution No. 107, dated 25 February 2016, RODOVID BANK JSC has been declared insolvent and transferred under the jurisdiction of the Deposit Guarantee Fund

RODOVID BANK JSC was recapitalized by the state in 2009-2011. Since 2011, this bank has been operating in the capacity of a remedial bank. The remedial bank was initially charged with the task of handling public sector banks' assets and recovering public funds spent on the bank’s recapitalization. It was estimated that it would take the bank up to five years to fulfil this task. 

However, the task was not carried through for the following reasons. First, effective legal mechanisms governing the transfer and the disposition of failed banks' problematic assets, which are essential for the efficient operation of a remedial bank, have not been put in place. Second, RODOVID BANK JSC has delivered poor performance in handling its own assets. During its operation as a remedial bank, the operating profit made by the bank was only enough to cover expenditures, and the state did not receive any dividends from its operation.

This being said, following the entry into force of the Law of Ukraine On Household Deposit Guarantee System in 2012, a special agency was established to resolve insolvent banks. Since then, the Deposit Guarantee Fund (the Fund) has been responsible for the disposition of failed banks' problematic assets, the reimbursement to depositors and  the preservation of assets.  Thus, the functions performed by RODOVID BANK JSC and the Fund are overlapped.

Given the bank’s loss-making operation, its low efficiency in handling problematic assets (accounting for 92% of the bank’s total assets) and its outstanding problematic debts owed to creditors, and primarily to the NBU, RODOVID BANK JSC would subsequently require financial support from the state.




RODOVID BANK JSC was hard hit by the crisis, having lost liquidity and the ability to serve clients. In 2009, it was placed under provisional administration.  In 2009, the Government resolved that the bank be recapitalized by the state through a capital injection of up to UAH 8.4 billion. Another UAH 3.95 was injected into the bank by the state in 2011, bringing the total recapitalization amount to UAH 12.35 billion.  As a result of the capital increase, the state's shareholding in the bank stands at 99.9%.


The aforementioned measures were taken to address the repercussions of the global financial crisis and were prompted by the need to stabilize Ukraine’s banking system and to protect the interests of depositors.


Thus, owing to the bank’s recapitalization, almost UAH 1o billion was repaid to this bank’s individual depositors and the depositors of Ukrprombank LLC whose liabilities were assumed by RODOVID BANK JSC.


Since 2011, RODOVID BANK JSC has been operating in the capacity of a remedial bank pursuant to Ordinance of the Cabinet of Ministers of Ukraine No. 880-р of 14 September 2009, and NBU Board Resolution No.471, dated 23 December 2011 On Approval of the Regulation on the Rules Governing Registration, Issuance of Licenses, and Regulation of Remedial Bank’s Activities, as well as License No. 1 of 15 June 2012 held by the remedial bank.


The Law of Ukraine On Household Deposit Guarantee System (as amended in 2014-2015) passed in 2012 provided the Deposit Guarantee Fund with a mandate to resolve insolvent banks, dispose assets of failed financial institutions, reimburse depositors, and preserve banks’ assets and liabilities.




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