On September 24, 2014, the National Bank of Ukraine passed a decision to remove GREEN BANK PJSC (hereinafter – the Bank) from the market. The legal basis for this decision is laid down in the Law of Ukraine "On Banks and Banking" and "Regulation on application by the National Bank of Ukraine of enforcement measures for violation the banking legislation.
In 2014 – 2014, the Bank has consistently violated the legislation on prevention and counteraction to legalization (laundering) of the proceeds from crime, and performed risky activities, thus posing a threat to the interests of depositors and other creditors. Upon the results of the inspections, the National Bank of Ukraine has held the Bank and its managers liable 4 times (NBU has imposed fines, removed bank managers from office, and suspended some transactions). Overall, during 2013-2014 the bank has performed financial transactions to convert funds into cash for a total of UAH 20 billion. At the same time, in view of the fact that the Bank has an insignificant amount of household deposits, its removal from the market will in no way affect the stability of the banking sector.
"The National Bank is consistent in its actions aimed at purging the banking sector of non-viable banks and banks-violators. We have finalized and put in place a clear mechanism to apply harsh enforcement measures against banks that are engaged in money laundering activities. I refer to Resolution No. 593 that lays down legal basis for removing these banks from the market in a single-stage procedure," said First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk. He also emphasized that "...today's decision sends a strong message to the market that the regulator is set to take a tough line on those banks that perform risky transactions on such a large scale that may suggest that the bank is being deliberately used for illicit purposes. For sure, the banking community will respond positively to actions by the National Bank of Ukraine".
For reference
Resolution No. 593 has broadened the definition of repeated violation of the legislation on prevention and counteraction to legalization (laundering) of the proceeds from crime, or terrorist financing (hereinafter – legislation). This resolution sets forth an exhaustive list of grounds for declaring a bank insolvent. The definition of repeated violation of the legislation that poses a threat to the interests of depositors and other creditors has been expanded to include "establishment of facts that prove bank's engagement in risky activities and application by the National Bank of Ukraine of enforcement measures against a bank for violation the banking legislation on two or more occasions during three consecutive years".
The aforementioned will allow the National Bank of Ukraine to enhance the effectiveness of banking supervision, improve the procedure for applying enforcement measures, prevent the use of banking services for legalization (laundering) of the proceeds from crime, or terrorist financing as a result of bank's engagement in risky activities that pose a threat to the interests of depositors and other creditors.
Approved by NBU Board Resolution No. 346, dated August 17, 2012, [with amendments introduced by NBU Board Resolution No. 593, dated September 22, 2014, "On Amendments to the Regulation on application by the National Bank of Ukraine of enforcement measures for violation of for the banking legislation (hereinafter - Resolution No. 593)].