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National Bank of Ukraine Decides to Revoke the Banking License of Bank Veles PJSC and Begin Liquidation

On 10 December 2015, the National Bank of Ukraine decided to revoke the banking license of Bank Veles PJSC and begin liquidation procedures for conducting bank operations with a high level of risk and systematic breaches of financial monitoring laws (pursuant to Articles 73 and 77 of the Law of Ukraine On Banks and Banking).

In September of the current year, the NBU prevented an attempt to move funds worth nearly USD 460 million out of the country with the use of documents having fictitious signs. This failed attempt was the basis for the inspection of the bank on financial monitoring.

The inspection identified facts of risky bank activities and a number of transactions whose nature gives grounds to believe that they were aimed at:

Avoidance of fulfilling the requirements and restrictions provided for by banking and currency laws on financial monitoring;

Participation (rendering services by the bank) in conducting financial operations aimed at moving funds abroad (in particular, operations related to transferring funds abroad, etc.).

Nearly 90% of all the operations conducted by the bank were just like those above. For the part of the year, these activities exceeded USD 100 million. Moreover, a significant number of the operations were conducted using forged documents.

The liquidation of the bank will not make an impact on financial market stability taking into account a modest volume of assets (at the end of Q3 2015, USD 314.2 million) and a small number of individual customers (nearly 150 persons).

For reference

Pursuant to Article 77 of the Law of Ukraine On Banks and Banking, the NBU  has the right to revoke the banking license of a bank if:

  • It has established that documents submitted by the bank to obtain a banking license contained inadequate information;
  • The bank has not effected any banking transaction within a year since the day it was issued a license;
  • There was detected a repeated breach by a bank of the laws covering the issues of anti-money laundering, combating terrorist financing, and the proliferation of weapons of mass destruction.
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