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JSCB CAPITAL PJSC declared insolvent

On July 20, 2015, PUBLIC JOINT-STOCK COMPANY JOINT-STOCK COMMERCIAL BANK CAPITAL (hereinafter – JSCB CAPITAL PJSC) was declared insolvent by the National Bank of Ukraine.

In January 2015, JSCB CAPITAL PJSC was declared a problem bank due to the poor quality of its assets and given the fact that the bank faced a liquidity risk stemming from a reduction in the high-quality assets.

JSCB CAPITAL PJSC was obliged within a 180-day period (until July 20, 2015) to bring its activities into conformity with the applicable Ukrainian laws, including the NBU regulations.

However, the efforts by the bank's qualifying shareholder to put the bank back on track have failed. The reason for this was that the bulk of assets held by the bank and its operational capabilities were left in the temporarily occupied territory of Ukraine, which made it impossible either to secure the cash flow needed to meet the needs of depositors and creditors, or ensure the appropriate level of risk management. 

In view of the above, and in order to protect the interests of depositors and other creditors, by virtue of Articles 7, 15, and 55 of the Law of Ukraine on the National Bank of Ukraine, and Articles 67, 73, 75, and 76 of the Law of Ukraine On Banks and Banking, the Board of the National Bank of Ukraine adopted a decision to declare JSCB CAPITAL PJSC insolvent.

According to the applicable Ukrainian laws, the bank that has been declared insolvent shall be placed under jurisdiction of the Deposit Guarantee Fund (hereinafter – the Fund), which shall appoint the provisional administration and authorized officials to this financial institution. The Fund guarantees the reimbursement of deposits to all depositors who will receive compensation for the amount of their deposit, including the interest accrued thereon on the date when the National Bank of Ukraine adopts a decision to declare the bank insolvent and the Fund initiates a winding-up procedure against this bank, but up to the compensation limit established on the date of the respective decision, regardless of the number of deposits held in one bank.

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