Considering recent legislative changes and Ukraine’s commitments under the Memorandum on Economic and Financial Policy and taking into account high risks run by banks under operations with related persons, the National Bank of Ukraine analyzes banks’ asset operations with related persons.

For that purpose, on 12 May 2015 the Board of the National Bank of Ukraine has passed Resolution 314 On the Measures to be Taken to Have Banks Bring the Turnover of Asset Operations with Related Persons into Conformity with Regulatory Requirements (Resolution 314).

This resolution sets out the form of report on the turnover of bank’s asset operations with related persons and the deadline for banks to file the report with the National Bank of Ukraine.

Based on a review of these reports the National Bank will determine the turnover of asset operations with related persons for every bank and the actual norm of the maximum credit risk for bank’s operations with related persons (R9). This norm, applicable to all banks, is set out in Resolution 312 of the Board of the National Bank of Ukraine dated 12.05.2015 On the Approval of the Amendments to the Instruction on the Procedure of Regulating Banking Business in Ukraine.

If the aforementioned norm is exceeded, a bank is required to devise and submit to the National Bank of Ukraine an action plan on bringing the norm into conformity with the National Bank’s requirements.

Resolution 314 envisages an audit of asset operations with related persons at the 20 banks with the largest amount of assets. This audit will be performed by Big Four audit firms according to Specification approved by Resolution 314.

The National Bank of Ukraine will differentiate the deadlines for bringing the R9 norm into conformity with the required value depending on the actual deviation amount.