Speaking at a briefing held at the National Bank of Ukraine, Ms Vira Rychakivska, Deputy Governor of the National Bank of Ukraine, has said that NBU Board Resolution dated 6 June 2013 No. 210 "On Setting an Upper Limit on Cash Payments" registered with the Ministry of Justice of Ukraine on 2 July 2013 under No. 1109/23641 (hereinafter referred to as Resolution No. 210) takes effect from 1 September 2013.
Among other things, Ms Vira Rychakivska has mentioned that pursuant to Resolution No. 210 cash payments between an individual (natural person) and an enterprise (entrepreneur) for goods and services shall not exceed UAH 150,000. In addition, cash payments of up to UAH 150,000 are permitted between natural persons under purchase and sales agreements subject to notarization.
Natural persons are allowed to make payments in excess of UAH 150,000 by transferring funds from one current account to another one, depositing and/or transferring funds to current accounts, including the notary deposit account, or separate current account in national currency.
At the same time, payments in cash in relation to transactions carried out between enterprises (entrepreneurs) within one business day shall be capped at UAH 10,000.
Ms Vira Rychakivska, Deputy Governor of the National Bank of Ukraine has noted: "The main purpose of imposing restrictions on cash payments is to increase the volume of cashless payments and raise additional resources to boost lending to the economy. We hope that this move will increase the inflow of financial resources of the economic agents into the banking system and contribute to the enhancement of banks' liquidity (an additional source of short-term resources worth approximately UAH 6 billion). Restrictions on cash payments are expected to decrease the level of deposit dollarization (according to projections, it will decline by 0.5 percentage point) and lead to the growth of cashless payments made by natural persons (the annual growth rate of cashless payments is projected to climb to 5%)".
Ms Vira Rychakivska has placed special emphasis on the amount of commission fee charged by banks for the transfer of funds and opening accounts. She said: "Although banks have discretion in setting interest rates and charging commission fees for services rendered, the National Bank of Ukraine calls for banks to seek optimization of their income and not to place extra financial burden on natural persons arising from paying commission fee to the bank for the transfer of funds. We seek understanding and backing from the banking community".
Ms Vira Rychakivska has stressed that many EU member states have already imposed restrictions on cash payments, while others intend to impose such limitations. Therefore, the move to limit cash payments by the National Bank of Ukraine is consistent with international experience.
The Deputy Governor of the National Bank of Ukraine paid special attention to placing cash transaction under control. In accordance with the Tax Code of Ukraine, the state tax authorities exercise control over cash payments in relation to the settlement of cash transactions for goods (services). Ms Vira Rychakivska has noted that we should avoid drawing unnecessary attention to the actions by tax authorities as the imposition of restrictions on cash payments is unlikely to bring changes to their activities. In addition, certain categories of citizens (for instance, public sector workers) are required to provide information on the property status (including real estate, vehicles) when filling in tax returns.
According to Ms Vira Rychakivska, setting an upper limit of UAH 150,000 on cash payments will gradually raise public awareness of the need to use cashless payments and make them more attractive to the population.