The National Bank of Ukraine has taken a decision on revoking a banking license and liquidating TERRA BANK PJSC.
Commenting on the decision of the regulator, Oleksandr Pysaruk, NBU Deputy Governor, said that due to worsening of TERRA BANK PJSC performance indicators, in mid-July 2014 the National Bank of Ukraine introduced a special monitoring regime to control the bank’s activities by appointing a curator who is an official of the NBU.
“Within this period, in order to stabilize the bank’s activities and eliminate violations and the reasons for deterioration of its financial standing, the National Bank repeatedly addressed the owners and the management of the bank with requirements and recommendations to take prompt measures aimed at improving its financial standing”, Oleksandr Pysaruk said. “However, the bank’s shareholders and management failed to take actions needed for stabilization of the bank’s operation”.
As the situation deteriorated and TERRA BANK PJSC could not perform its obligations to depositors and other creditors and violated provisions of the NBU regulations, the regulator declared the bank a problem bank in early August 2014.
“TERRA BANK PJSC failed to comply with the laws and NBU regulations and submit to the NBU the resolution plan containing sufficient and timely measures for improving its financial standing and adjusting its activities to the requirements of the laws of Ukraine”, he said, adding that “shareholders of TERRA BANK PJSC missed the chance to recover the bank and failed to provide financial support”.
In view of the above, by virtue of Article 76 of the Law of Ukraine On Banks and Banking, the Board of the National Bank of Ukraine issued Resolution No. 518 of 21.08.2014 to declare TERRA BANK PJSC insolvent.
In compliance with Article 34 of the Ukrainian Law On Household Deposit Guarantee System, the Executive Directorate of the Household Deposit Guarantee Fund (the DGF), on the next business day after the bank was declared insolvent by the NBU, placed the bank under a provisional administration (for the period from 22.08.2014 to 22.11.2014), and appointed an authorized person to that effect. On 20.11.2014, the DGF Executive Directorate issued Resolution No. 122 prolonging the provisional administration at TERRA BANK PJSC till 22.12.2014.
Having considered the DGF proposal concerning liquidation of the insolvent bank, the National Bank of Ukraine has taken a decision to revoke a banking license and liquidate TERRA BANK PJSC, coming into force on 24.12.2014.