In September 2013, the Deposit Guarantee Fund (hereinafter referred to as the Fund) marks the 15th anniversary of its establishment.

"The Deposit Guarantee Fund is an essential part of the domestic banking system," noted Governor of the National Bank of Ukraine Ihor Sorkin.

According to Mr. Ihor Sorkin, the Fund has evolved since its establishment in 1998, and the adoption of the Law in 2001 guaranteeing that the Fund would pay out compensation for household deposits which had become inaccessible. The Fund continued to evolve when its mandate had been extended to acquire new functions that are fully consistent with international best practice standards. "The Fund has paid out compensation to the depositors of 34 banks. Over 400 thousand Ukrainian citizens have received UAH 7 billion in compensation for deposits," Mr. Ihor Sorkin summarized.

Ukraine was one of the first post-Soviet countries to put in place the depositor protection scheme that has already proved to be efficient. The scheme is being currently enhanced. "The deposit amount insured by the Fund has proved instrumental in strengthening depositors' confidence in the banking system," stressed the Governor of the National Bank of Ukraine. Mr. Ihor Sorkin also added that the Fund had increased the compensation limit for deposits 11 times from UAH 500 in 1998 to UAH 200 thousand, effective from 2012.

 In 2012, the Law of Ukraine "On the Household Deposit Insurance System" came into force in 2012. The new Law has cemented the banking system’s position by enhancing the resolution mechanism for insolvent banks.

"The Fund plays its part in maintaining stability, strengthening public confidence in the banking system, and preventing a run on deposits. This is corroborated by a 28% increase (UAH 50 billion) in hryvnia-denominated household deposits in the January to August period," noted Mr. Ihor Sorkin.

The cooperation between the National Bank of Ukraine and the Fund will further strengthen public confidence in the banking system and foster sustainable economic growth.

For reference:

The Fund is a public entity that has been operating in accordance with the  Law of Ukraine "On the Household Deposit Insurance System" No.4452-VI of 23 February 2012. 

The Fund was established to protect the rights and legitimate interests of bank depositors.

The main task of the Fund is to ensure that the deposit guarantee scheme is efficient and wind down insolvent banks.

Under the above-mentioned Law, depositors will receive compensation for the amount of their deposit up to the limit of UAH 200 thousand, including the interest accrued on the day when the National Bank of Ukraine makes the decision to place a bank into resolution. The amount guaranteed was capped at UAH 150,000 (effective from 2008), UAH 50,000 (effective from 2007), UAH 15,000 (effective from 2006), UAH 5, 000 (effective from 2005), UAH 3, 000 (effective from 2004), UAH 1,200 (effective from 2001), and UAH 500 (effective from 1998).