On May 29, 2014, there was a joint meeting of Governor of the National Bank of Ukraine Stepan Kubiv, Minister of Finance of Ukraine Oleksandr Shlapak, First Deputy Minister of Revenues and Duties Ihor Bilorus, and the banking community. The meeting was attended by senior managers from the Ukrainian leading banks which fall into Group 1 and Group 2 banks, and representatives of banking associations.

Governor of the National Bank of Ukraine Stepan Kubiv thanked the banking community for their consolidated efforts in today's challenging conditions and their commitment to structural reforms in the banking sector.

The meeting participants discussed a number of current issues and tasks facing the banking system. Resolving these issues will help put the economy on the path of sustainable and balanced development.

Among other things, the meeting participants contemplated ways to step up banks' operations in the sovereign securities market. Minister of Finance of Ukraine Oleksandr Shlapak pointed out that the Ukrainian government had always counted on Ukrainian banks and expressed the hope that banks would step up their efforts to provide financing to meet the future needs of an economy.

Ms Olena Shcherbakova, Director of General Department of Monetary Policy of the National Bank of Ukraine, emphasized that banks take on social responsibility through purchasing sovereign securities.

“Every single hryvnia invested by the bank in sovereign securities helps the Government get the economy, public finances and the social sphere back on track in difficult times. I think we needn’t once again emphasize that without achieving macroeconomic stability no institution or bank can make plans for the future and devise long-term development strategies,” she noted.

Ms Olena Shcherbakova also pointed out that the central bank gave priority to providing all the banks equal access to liquidity and making every effort to resume the smooth operation of the interbank credit market.

In the course of the meeting, the sides agreed to hold a meeting the following week in order to maintain a professional dialogue and discuss ways to make sovereign securities more attractive to the banking sector.

First Deputy Minister of Revenues and Duties Ihor Bilorus unveiled the government's plans to issue domestic sovereign bonds in order to pay off existing VAT arrears due to economic entities. According to him, this new highly liquid instrument is to be issued in June-July 2014. It is expected to revive the financial market.

Mr Stepan Kubiv drew the attention of representatives from banking institutions to the fact that a diagnostic assessment of banks had been launched. He expressed his confidence that it would contribute to further capitalization of the domestic banking system.

The meeting participants also discussed the mechanisms to mitigate risks when performing customer cash transactions.

Another important issue relating to the social responsibility of the banking business in the present-day circumstances on the meeting agenda was the provision of assistance and social protection of the military men who defend the country today.

As is known, the National Bank of Ukraine has come up with the proposal to explore the possibility of revising the terms and conditions for repaying debt obligations under loan agreements concluded with the persons conscripted into the army. The central bank has put forward a proposal to devise a scheme designed to help the military men repay both the initial principal and the interest and asked banks not to impose penalty interests on borrowers that have failed to meet their debt obligations.

The meeting participants agreed that it would be expedient to devise mechanisms to provide assistance to the borrowers conscripted into the army and promptly publish related information on the official websites of the financial institutions. To date, 4 banks have already devised these schemes and started providing assistance to the borrowers conscripted into the army.

It is worth mentioning that Oschadbank JSC has recently started selling treasury bonds “Military” with a face value of UAH 1000. Funds raised will be channeled to shore up the Ukrainian army. The government officials, representatives of the banking community, and ordinary citizens backing the initiative to support the Armed Forces of Ukraine have already purchased these bonds.