CB PrivatBank PJSC became the second Ukrainian bank to provide custodial services for NBU cash reserves based upon permits issued by the regulator and supply regional banks with cash and accept excess cash from them. Decision No 460-D to this effect was issued by the NBU Board on 19 July 2017.
Therefore, the NBU continues to delegate some of its functions performed in regions to other market participants as part of implementing the Policy on Cash Circulation in Ukraine approved by NBU Board Decision No 207-D of 11 August 2016. This move will enable the regulator to gradually shift away from an in-house centralized cash circulation model, which is currently in place in Ukraine, toward an outsourcing model.
In accordance with the Regulation On the Selection Procedure and Eligibility Criteria to be Met by Banks to Qualify as Custodians of NBU Cash Reserves approved by Board Resolution No. 389 of 28 September 2016 (hereinafter - resolution No.389), the central bank shall select banks to provide custodial services for NBU cash reserves.
Banks that have submitted written applications notifying the regulator of their intent to become authorized banks and meet the criteria set out in Regulation No. 389 shall be admitted to the selection procedure.
CB PrivatBank PJSC filed a written application notify the NBU of its intent to become an authorized bank eligible to provide custodial services for NBU cash reserves and provided information specified in paragraph 2 of Regulation 389.
In accordance with paragraph 1.7 of CB PrivatBank PJSC’s Charter approved by Order of the Ministry of Finance of Ukraine No 409 (the bank’s sole shareholder’s decision) of 3 April 2017, 100% of the bank’s authorized capital is owned by the state.
CB PrivatBank PJSC has 25 years of experience in handling cash servicing, applying advanced internationally recognized technology to provide cash-in-transit and cash collection services.
Moreover, the bank has a wide network of branches and stand-alone offices operating in 24 regions. Thus, as of 1 July 2017, CB PrivatBank PJSC has 32 branches and 2,450 offices.
Pursuant to Regulation No. 389, the NBU Board issued Decision No. 460-D to designate CB PrivatBank PJSC as an authorized banks eligible to provide custodial services for NBU cash reserves.
This decision provides the grounds for the NBU to enter into an agreement with CB PrivatBank PJSC for the provison of custodial services for NBU cash reserves againist collateral.
As a side note, Oshchadbank JSC was earlier granted the status of an authorized bank eligible to provide custodial services for NBU cash reserves.