Oshchadbank JSC is the first 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.
Therefore, the NBU shall delegate some of its functions performed in regions to other market participants within the framework of the Policy on Cash Circulation in Ukraine. 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.
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 NBU Board Resolution No. 389 of 28 September 2016 (hereinafter - resolution No. 389), the NBU 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.
Oshchadbank JSC 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:
- according to the charter approved by Resolution of the Cabinet of Ministers of Ukraine of 25 February 2003, Oshchadbank JSC is a state-owned bank with 100% of its shares belonging to the state represented by the Cabinet of Ministers of Ukraine;
- Oshchadbank JSC has the right to engage itself in banking upon obtaining the banking license by means of rendering the banking services;
- Over the past 10 years, this bank has been engaged in the provision of cash collection and cash-in-transit services on the basis of the written permission from the NBU and has the most extensive cash collection network among Ukrainian banks;
- and has an extensive network of separate subdivisions and regional representative offices.
Pursuant to Regulation No. 389, the NBU Board issued Decision No. 102-D to designate Oshchadbank JSC 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 Oshchadbank JSC for the provision of custodial services for NBU cash reserves against collateral.