In order to settle the misapprehensions during FX transactions and minimize the impact of a human factor when defining the degree of wear of the foreign currency banknotes, the NBU has implemented a range of measures to solve the situation.
The approved amendments to the regulatory framework that cancel a list of attributes of the banknotes’ minor wear
All foreign - currency banknotes, except for those considerably worn-out and damaged, shall be accepted for FX transactions.
All foreign currency banknotes, the authenticity of which is confirmed using counters and detectors, shall be accepted for exchange. This eliminates the impact of human factor in defining the degree of the banknote’s wear.
The regulator prohibited banks and nonbank institutions to refuse customers in exchanging the foreign currency that in its design and security features completely complies with the samples and descriptions of foreign central banks, and the authenticity of which is confirmed using the respective equipment.
The banknotes that have the attributes of considerable wear (their list is available in the information for reference) shall be accepted for collection at the rates of banks and nonbank financial institutions. The banks and nonbank institutions that perform those transactions are obliged to place in their teller stations the information available to customers with a clear list of the attributes of considerable wear and collection rates.
When performing foreign exchange transactions, banks and nonbank institutions are prohibited from setting any restrictions as for the face value and the year of issue of a foreign currency banknote that is a legal tender in the territory of a respective foreign state
The NBU has conducted the meeting with banks and nonbank financial institutions licensed to conduct trading in cash currency valuables.
The NBU stressed that it had not established any restrictions as for the year of issue of foreign currency banknotes and their face value. On the contrary, the NBU regulations directly prohibit banks and nonbank financial institutions from setting any similar restrictions.
The regulator’s principle position is as follows: if the violation is found, it will be deemed not only as the noncompliance with the NBU regulatory requirements but as a potential attribute of fraudulent activities.
Based on the facts of violations of the NBU regulatory requirements stated in the requests of the financial services consumers, the NBU has introduced an enhanced control and will apply reasonable corrective measures to institutions (including suspension of certain types of FX transactions)
Thus, depending on the gravity of the committed offence and in compliance with the adequacy principle, the NBU will apply the corrective measures that would impose the following maximum amount of fine:
- up to UAH 400,000 for banks, the amount is planned to be increased for major violations.
- up to 5% of the institution’s equity capital for nonbank financial institutions.
In the case of breach of consumer rights by a bank or a nonbank financial institution, the consumer is advised to file a claim to the top managers of such a bank or a nonbank financial institution.
In absence of any reaction from the institution’s management, the consumer should complain to the NBU. The detailed information on submitting complaint to the NBU is available at: https://bank.gov.ua/en/consumer-protection.
Banks and nonbank financial institutions shall accept for collection only:
1) banknotes of foreign currency that acquired in circulation one or more attributes of considerable wear/damage:
- broken (cut) in parts
- with damaged design elements and security features (removed digital or text indications of a face value, depiction of a portrait, optically variable elements, security threads)
- with a changed original color of paper and/or depictions
- local soiling (stains), including those visible under the UV light, the total area of which does not exceed a half of a banknote
- general soiling, including that causing the paper luminescence in the UV light
- partially burnt, burnt through, brittle (damaged due to a durable exposure to humidity, various liquids, chemicals, or with the attributes of decomposing)
- with obvious printing defects
2) banknotes withdrawn from circulation by a foreign state following the date announced by the respective issuing bank (upon approval of a correspondent bank of the respective state to exchange those banknotes).
It is provided for by amendments to the Instruction On Cash Handling Procedures in Banks and Payment Transactions by Payment Services Providers in Ukraine, approved by NBU Board Resolution No. 103 dated 25 September 2018 (as amended).
Other amendments are introduced into NBU Board Resolution No.75 On Amendments to the Regulation On the Structure of the Foreign Exchange Market of Ukraine and Rules and Procedure for Trading in Foreign Currency and Investment Metals in the Foreign Exchange Market of Ukraine dated 20 June 2023.