Today, on September 24, 2014, the National Bank of Ukraine hosted a regular meeting with the senior managers of 40 major banks in Ukraine to discuss ways to stabilize the situation in the banking and foreign exchange markets. The agenda of the meeting addressed a number of issues, including the cash foreign exchange market issues, the exit from the market of banks conducting illicit money laundering transactions, and ways to stop the deposit outflow. The meeting was a logical follow-up to the meeting with the participation of the President of Ukraine, the Prime Minister of Ukraine and senior officers of public institutions that took place at the National Bank yesterday, on September 23.

Governor of the National Bank of Ukraine Valeriia Gontareva reminded those present at the meeting that the President of Ukraine had given top priority to the task of counteracting substantial exchange rate fluctuations, for it was crucial for ensuring economic security of the country. "With military aggression exerting unprecedented pressure upon Ukraine, devaluation expectations of the population have deteriorated and the task of the National Bank of Ukraine and the Government is to offset the impact of emotions on the financial market," said Valeria Gontareva, adding that on September 25, the National Bank would offer USD 200 million to banks at the foreign exchange auction.

Valeriia Gontareva also noted that the regulator expects an adequate response from the banking community – providing banks' cash departments across the country with foreign exchange cash so that every citizen can purchase foreign exchange in an amount equivalent to UAH 3,000 per business day without any problems. To this end, each bank has to ensure that its cash departments operate in strict compliance with regulations governing foreign exchange operations, in particular, ensure control over the amount of foreign exchange cash sold to one person per day. She reminded the meeting participants that banks' senior managers bear personal responsibility for adherence to the legislation and the National Bank has a toolkit of enforcement measures at its disposal. These measures primarily include suspension of transactions that pose a heightened risk of being used for illicit purposes.

First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk informed those present at the meeting that the National Bank of Ukraine is preparing a decision to declare one of the banks belonging to Group 4 banks insolvent in view of the fact that this bank is engaged in risky activities, which poses a threat to the interests of depositors and other creditors. This bank has been repeatedly held to account for violation of the legislation and its removal from the market will send a powerful signal to the banking community that the regulator is resolutely determined to clamp down on banks – converting centers. "I advise you to carry out explanatory work among financial monitoring departments in order to tighten control over risky transactions if you do not want your financial institutions to be targeted by NBU sanctions," Oleksandr Pysaruk said addressing the banks' senior managers present at the meeting.

The bankers expressed their views as to the practical application of restrictions on foreign exchange purchase and the development of cashless payments as an instrument to absorb cash hryvnia.  It was decided that the meeting participants would work out jointly proposals, use the Independent Association of Ukrainian Banks as a platform to coordinate these proposals, and submit them to the National Bank of Ukraine as soon as possible.

Wrapping up the meeting, Valeriia Gontareva once again put an emphasis on collective responsibility of the National Bank and Ukrainian banks for the situation in financial markets and the stability of the banking system as a whole.

As determined in NBU Board Resolution No. 591, dated September 22, 2014, "On Amendments to Some NBU Regulations"