The National Bank of Ukraine has adopted a regulation governing  the transfer of NBU cash reserves to authorized banks On 7 December, the NBU Board issued Resolution No 408 On Approval of the Regulation On the Transfer for Custody to the Authorized Banks (hereinafter – Regulation No. 408).

This document sets out the following:

• conditions for the transfer of NBU cash reserves in domestic currency to the authorized banks for custody;  
• conditions for the safekeeping of cash reserves by the authorized bank;
• the use of cash accepted for custody to supply the cash desks; and
• the inclusion of banknotes and coins from the cash desks in the cash reserves accepted for custody.

In accordance with Regulation No 408, banks that have been granted the status of an authorized bank may be involved to provide services related to the storage of NBU cash as provided for by  the Regulation On  the Selection Procedure and Eligibility Criteria to be Met by Banks to Qualify as Custodians of NBU Cash Reserves approved by NBU Board Resolution No. 389 of 28 September 2016.

In accordance with Regulation No. 408 and under the agreement for custody of NBU cash reserves, authorized banks shall be entitled to safekeep NBU cash reserves and use them to supply their cash desks with cash for cash servicing of customers and other banks.

In addition, the NBU will enter into agreement for custody with an authorized banks, which would set out the rights, obligations and responsibilities of the parties and ensure the fulfilment of obligations.

Resolution No. 408 shall come into effect from 13 December 2016, except points 2 and 3 of subparagraph 18 of Section II of the Regulation, which will come into effect from 1 December 2018. The afore mentioned paragraphs set out  the requirement for the cash operating unit of  an authorized bank to have an enclosed area cash-in-transit vehicles and a gateway unit and for the vault to be equipped with automatic air-conditioning system and ventilation.

Regulation No. 408 is developed with the aim of implementing Policy on Cash Circulation in Ukraine approved by NBU Board Decision No. 316-рш of 28 September 2016.    This policy provides for a shift from an in-house centralized cash circulation model, which is currently in place in Ukraine, to an outsourcing model. Under the outsourcing model, the NBU contracts out part of the cash distribution functions that are performed in the regions  to other market participants, including banks and Cash-in-Transit companies (CIT-companies).