With the entry into force of the Law of Ukraine   On Amendments to Certain Legal Acts of Ukraine Regarding the Terms and Conditions of Refunding Time Deposits (hereinafter – the Law), a bank has been relieved from the obligation to refund time deposits of individuals  upon the first demand of  a depositor.

The main aim of this law is to balance the interests of banks and their depositors.  On the one hand, a depositor retains the right to choose the terms of deposits and deposit maturity. On the other hand, having arrangements in place to handle the repayment of time deposits gives banks the legal leverage to balance their assets and liabilities.

With the aim of meeting the requirements  of the Law, on August 12, 2015, the Board of the National Bank of Ukraine adopted Resolution No.520 On Amendments to the Regulation on the Procedure for Performing Deposit Operations with Legal Entities and Individuals by the Banks of Ukraine.

This Resolution envisages, inter alia, that  bank   customers shall have the right to withdraw time deposits (including those deposited against the issuance of a savings certificate (certificate of deposit) and  collect the interest accrued thereon upon the maturity date set out in the deposit agreement. Early repayment of a time deposit,  including interest   accrued thereon, is only possible if provided for in the term deposit agreement.

The provisions under which savings certificates (certificates of deposit) are split into coupon, zero-coupon and  interest-bearing certificates of deposit have been removed from the Regulation as inconsistent with the  procedure for refunding a time deposit  prescribed by the Law.

Resolution No. 520 has successfully undergone a public consultation process.