The action plan for implementing the transformation project of the National Bank of Ukraine foresees the following phases: Preparation (completed in August 2014); Organizational structure transformation (Stage I), Re-engineering processes (Stage II) and central bank’s new vision and mission implementation (Stage III).
“When drawing up an Action Plan for the implementation of the NBU transformation project, we identified 7 main areas of focus. These included: determining the NBU’s core functions (mandate) and removing non-core functions from the regulator's organizational structure, establishing a new functional organizational structure, reducing the number of levels in the management hierarchy, centralizing functions, rationalizing the network of regional offices, re-engineering processes,” underlined NBU Deputy Governor Vladyslav Rashkovan at a press briefing.
First of all, the NBU focused on its core function of ensuring price and financial stability, thus contributing to the sustainable economic development of Ukraine.
It was decided to remove the non-core functions and assets from the central bank's organizational structure and balance sheet.
In particular, the Banking University (Kyiv) and the Ukrainian Banking Academy (Sumy) were transferred under the jurisdiction of the Ministry of Education and Science of Ukraine.
The NBU transferred to the Ministry of Information Policy of Ukraine the powers on state’s corporate rights for management of BTB TV-channel.
“The NBU will save up to UAH 500 million annually on operational expenses through the removal non-core functions,” said Vladyslav Rashkovan.
The NBU has analyzed organizational structures of over hundred central banks across the globe and opted for using the organizational structure of the Bank of England as a role model. Now the NBU’s organizational structure consists of six clusters of departments responsible for related policy functions, each of which is overseen by one Board member. These clusters include the cluster of departments subordinate to the NBU Governor, prudential supervision, monetary stability, open market operations, cash/cashless settlements, finance and administration clusters.
“Going forward, if Draft Laws of Ukraine No. 2413а, 2414а are adopted by the Parliament, it is envisaged to establish a separate cluster responsible for overseeing non-bank financial institutions that will be placed under the jurisdiction of the National Bank of Ukraine,” said the NBU Deputy Governor.
Staff rightsizing was a logical continuation of the NBU’s internal transformation.
“When the transformation project was launched, the NBU employed a total of 11,800 staff. We set a goal to reduce staff by 55% to 5,300 employees by the end of the second stage of the transformation project,” said Mr Rashkovan. “Staff downsizing is not limited to layoffs, it is rather the outcome of 41 internal transformation project being currently implemented at the bank”.
The role of regional offices in the activities of the regulator has been completely reviewed. In 2013, regional offices employed a total of 5,000 employees. By the end of this year, the regional staff will be reduced to 1,300 employees.
“We have fully centralized the regional offices, leaving a limited number of functions within the scope of their mandate. We have recently consolidated the balance sheets of almost all regional offices, except for Kyiv regional office and some structural units of the NBU, into a single centralized balance sheet. This enabled us to simplify the in-house processes, boost the efficiency of operations and enhance control over their execution, avoid overlapping and rationalize expenditures,” said Mr Rashkovan.
Next year, the regulator will focus its efforts on the initiation and implementation of new key projects required to follow through on the NBU’s mission and vision statement.