Regular version of site
Banking Supervision

The NBU supervises and regulates banks to promote the security and financial stability of Ukraine’s banking system. Banking supervision assures customers, depositors, lenders, and borrowers that banks are operating stably and are fulfilling their obligations in full and on time.

The NBU supervises and regulates all Ukrainian banks and their foreign subsidiaries, foreign banks in Ukraine, and other organizations and citizens in terms of compliance with the Law of Ukraine On Banks and Banking.

 

Supervision

The NBU studies the operations and analyzes the risks and outlooks for each individual bank and the banking system as a whole.

We apply the following approaches:

  • Professional judgement when assessing the risks to which a bank is exposed in the market. We apply best practices and tools of risk-based supervision to assess the sustainability and security of a bank’s operations.
  • Assessment of a bank’s current risks and the risks that are likely to materialize in the future. We are implementing an early warning system to respond to a bank’s problems to prevent and minimize adverse effects for the bank’s customers and partners, as well as the whole banking system.
  • Focus on the issues and banks that present the greatest risk to the sustainability of Ukraine’s banking system.

The sustainability and resilience of the banking system is key to the success of the country’s economy.

These tenets allow the NBU to identify at an early stage possible issues at a bank and react in a timely manner.

 

Supervision of banking groups

The NBU identifies and registers banking groups to prevent the potential withdrawal of funds from a bank to companies controlled by a single owner.

A banking group is a group of financial organizations that shares a common owner or controller.

By definition, the banking assets of a banking group must account for 50% of the group’s total assets.

 

Transparent ownership structure

Transparent ownership structures help eliminate excessive lending to a bank’s related parties and the withdrawal of funds from a bank. The ownership structure is deemed transparent if the links between a bank and its owners are identifiable.

These tenets allow the NBU to identify at an early stage possible issues at a bank and react in a timely manner.

The NBU is currently aware of the ultimate owners of the substantial equity positions of all banks operating in Ukraine.

 

Supervision of banks’ owners and managers

The NBU checks the business reputation of all owners of banks and their managers to protect that bank’s customers.

The owners and managers should have impeccable business reputations. Owners and managers of insolvent banks are not considered to have impeccable business reputations.

The NBU verifies the competence of bank managers and checks the status of bank owners’ property. The value of an owner’s property should equal or exceed the owner’s share in the bank’s capital. Bank owners must report the lawful origin of their property.

 

Regulation

The NBU is responsible for the legal framework for banking in Ukraine. We regulate the establishment and operation of banks, their relationships with depositors and lenders, and their responsibility towards the country and their customers. By doing so, we ensure a competitive landscape in the banking sector.

 

Our benchmark is the set of international standards and recommendations from the European Banking Authority and the Basel Committee on Banking Supervision. Currently, the NBU is reviewing its regulations to bring them in line with EU Directives as required by the Association Agreement between the EU and Ukraine.