On November 11, 2015, the  National Bank of Ukraine hosted a meeting with CEOs of Group 3 and 4 banks.    Governor of the National Bank of Ukraine Valeria Gontareva said that these two groups comprise 92 banks. Their market share accounts for 10%.

“Small banks face a number of requirements imposed by the regulator, including the requirements to increase their capital up to UAH 120 million by mid-2016 and ensure that the capital is real, disclose banks' ultimate beneficial owners, reduce the share of loans to insiders, and above all is not to engage in unlawful practices.  The NBU has a zero tolerance towards corrupt schemes in banking. The National Bank currently has the ability to put such banks into resolution within one day, even skipping the step to declare them problem banks,” said Valeria Gontareva at the meeting.    At the same time, she underlined that there is no “black list” of banks and the National Bank has not set any target as to the number of banks that should remain in the market.

First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk reiterated what the NBU Governor said: “Small and middle-sized banks have the right for existence, although they have to comply with all conditions and standards set by the National Bank: they have to be solvent regardless of the asset size, have a proper business model, unwind above-limit loans to related parties and bring them down to a sustainable level, formalize the   bank's transparent ownership structure, and stay away from risky activities that pose a threat to the interests of depositors.

In her turn, Director of the Banking Supervision Department Kateryna Rozhkova pointed out that the National Bank of Ukraine is in the process of shifting to a risk-based banking supervision framework, which would enable the regulator to have a better understanding of the situation in financial institutions and provide a faster response to challenges. “We have changed an approach to the banking supervision: perfunctory supervision practices will become a thing of the past. We are seeking to put in place the risk-based supervisory framework to have a transparent and resilient banking system.  Banks should act as “the circulatory system” for the economy, rather than being a “vacuum cleaner” that takes in deposits from households to advance loans to associated companies that are part of their owner’s business group.

Deputy Governor of the National Bank of Ukraine Vladyslav Rashkovan reminded the meeting participants that the banking system moves to the International Financial Reporting Standards (IFRS) from December1, 2015. “We have served all the banks with letters asking whether they are prepared to adopt the IFRS.  We strongly advise that banks pay special attention to financial reporting requirements as banks’ top managers are held personally liable for the accuracy of financial statements.  In addition, I strongly recommend that financial institutions pay special attention to the Annual Reports that are subject to independent audit.  We are set to examine closely financial statements so banks are advised to take a responsible attitude toward compiling financial statements and hiring competent and professional auditors,” said Vladyslav Rashkovan. 

In the course of the meeting, directors of the central bank’s relevant departments unveiled new approaches to banking inspection, banking supervision and financial monitoring.

“We are ready for a dialogue,” summed up Oleksandr Pysaruk. – By the end of the first quarter of 2016 all the banks are required to have a transparent ownership structure, and by July 2016 they must have authorized capital of not less than UAH 120 million. All these measures are crucial for ensuring the financial system stability and we hope that they will be met with understanding among banks.