Doing Business in Ukraine: How to Open Bank Account
Deposit Guarantee Fund (hereinafter — “DGF”) is established with the purpose of protecting the rights and legitimate interests of bank depositors.
The major objective of the DGF is to ensure:
- the functioning of the household deposits guarantee system
- resolution of failed banks.
Deposit Guarantee Fund was established in 1998 when the President of Ukraine signed the Decree «On Measures to Protect the Rights of Physical Persons as Depositors of Commercial Banks in Ukraine» which provided for the reimbursement of the deposits to the commercial banks at the amount of UAH 500.00.
Since then the coverage limit was increased 11 times. At present, the maximum coverage limit is – UAH 200,000.
Deposit Guarantee Fund covers the deposits of the individuals (natural persons) and sole traders.
All duly licensed banks in Ukraine are members of the DGF. The only bank which is not a member of the Fund is «VAT Derzhavniy Oschadniy Bank Ukrainy» (the National Savings Bank of Ukraine).
WHAT IS COVERED BY THE DEPOSIT GUARANTEE FUND
The Deposit Guarantee Fund (DGF) guarantees to pay out deposits to individuals, cash or non-cash money in Ukrainian or foreign currency received by a bank from a depositor (or received to an account of a depositor) under a deposit agreement or account agreement or under an issued registered certificate of deposit, including interests accrued thereon.
The DGF guarantees to pay out deposits to each depositor of a bank and the DGF shall refund the money in the amount of the deposit, including the interest as at the date of the commencement of the bank resolution procedure by the DGF, but the amount in question may not exceed the ceiling limit of the reimbursement for deposits set as of the said date regardless of the number of deposits in one bank.
The DGF guarantees to pay out deposits to each depositor of each DGF member bank, but the amount in question may not exceed UAH 200 000 in one bank.
The interest accrual on deposits shall be terminated on the last day prior to the commencement date of the bank resolution procedure by the DGF (in case of the decision made by the National Bank of Ukraine to revoke a banking license and liquidate the bank on the grounds specified in part two of Article 77 of the Law of Ukraine “On Banks and Banking” — on the date of the decision to revoke the banking license and liquidate the bank).
The DGF shall guarantee the payout to a depositor of a bank that has subsequently been reorganized, on the same terms and conditions as before such reorganization.
Deposits transferred to the bridge bank shall be guaranteed by the DGF on the same terms that had existed as of the date of their transfer.
The depositor shall have a right to receive the guaranteed amount of deposit at the expense of the DGF within the marginal guaranteed amount.
The DGF shall start disbursing the refunds to depositors in Ukraine’s domestic currency in the order and in the priority, established by the DGF, no longer than 20 days (for the banks with over 500,000 accounts in the database—no longer than 30 days) from the date of the commencement of the bank resolution procedure.
Payouts of foreign currency deposits shall be made in the national currency of Ukraine after recalculation of the deposit value at the official exchange rate of UAH to foreign currencies set by the National Bank of Ukraine as of the date of the commencement of the bank resolution procedure and the exercise of the provisional administration by the DGF. In case of the decision of the National Bank of Ukraine to revoke the banking license and liquidate the bank on the grounds listed in part two of Article 77 of the Law of Ukraine “On Banks and Banking”, the funds from a foreign currency deposit shall be refunded in the domestic currency of Ukraine after the conversion of the deposit amount at the official exchange rate of UAH to foreign currencies set by the National Bank of Ukraine as of the date of commencement of the bank liquidation.
The DGF shall complete the payout of the guaranteed deposits on the day of the document submission for making record in the Unified State Register of Legal Entities of liquidation of a bank as a legal entity.
PLEASE NOTE that in accordance with the second part of Article 77 “Revocation of the banking license and bank liquidation” of the Banking Law the National Bank of Ukraine has the right to revoke the banking license if:
1) it has established that the documents submitted by the bank to obtain a banking license contained inadequate information;
2) the bank has not had any banking transaction within a year from the day it was issued a license;
3) repeated breach by a bank of the laws covering the issues of anti-money laundering/combatting terrorist financing and the proliferation of weapons of mass destruction was detected.
Please be aware that in case of bank liquidation in accordance with part two of Article 77 of the Law of Ukraine “On Banks and Banking”, provisional administration is not introducted.
List of Banks in Ukraine http://listofbanksin.com/ListofbanksinUkraine.htm
HOW TO GET COMPENSATION IF YOUR BANK FAILS
HOW QUICKLY WILL THE PAYOUT START
The DGF starts the payout of the guaranteed amount of deposit in the national currency of Ukraine in the manner and in order of priority established by the DGF no longer than 20 business days (for the banks with over 500,000 accounts in the database - no longer than 30 days) from the day of the commencement of the bank resolution procedure by the DGF.
In the course of the provisional administration the payouts are made only under the agreements with a validity period that has expired at the date of the commencement of the bank resolution procedure and under the bank account agreements. After the revocation of the banking license and commencement of the liquidation process the deposits are paid out to all covered depositors regardless of the date of the deposit agreement maturity.
Payout of the guaranteed amount of deposit under bank account agreements is made only after receipt by the DGF of full information on transactions made by the payment system (domestic and international).
WHAT AMOUNT IS PAID OUT
The DGF shall refund the money in the amount of the deposit, including the interest as at the date of the commencement of the bank resolution procedure by the DGF, but the amount in question may not exceed UAH 200,000 regardless of the number of deposits in one bank.
Payouts of foreign currency deposits are made in the national currency of Ukraine after recalculation of the deposit value at the official exchange rate of UAH to foreign currencies set by the National Bank of Ukraine as of the date of the commencement of the bank resolution procedure.
WHERE CAN YOU GET YOUR REIMBURSEMENT AND WHAT DOCUMENTS TO PRESENT
The DGF disburses the guaranteed reimbursement amounts via agent banks that shall make the payouts in cash or cashless form (at discretion of the depositor). The payouts are made in accordance with the general depositors register (the list of depositors eligible for the deposit payouts). There is no need to file applications or send any documents to DGF in order to get reimbursement during the payouts according to the general depositors register. In the agent bank the depositors have to identify themselves by presenting passport or other ID, resident individuals should additionally provide taxpayers number card.
In case of payout to the third person on the ground of a proxy, he or she shall additionally provide agent bank with a notarized proxy.
Information regarding the starting date of the deposit payout as well as the list of the agent banks can be found on the DGF website (on the page of the failed bank). It’s also published in the official newspapers “Holos Ukrayiny” or “Uriadovy Kurier” and available at the telephone “Hotline”: 0-800-308-108.
WHEN DO YOU HAVE TO MAIL YOUR APPLICATION FORM
After completing of payouts according to the depositors general register (notification thereof will be published on the DGF website), a payout of guaranteed amount of deposits shall be made on the ground of an individual written application.
In this regard, depositor shall send to the DGF:
- copy of taxpayers number card
- copy of passport (pages with the surname, name and paternal name, as well as with information about the date of passport issuing and issuing authority, place of residence).
To receive reimbursement on the ground of a proxy, the authorized person should additionally provide DGF with a notarized copy of a proxy.
In case of payout to the legitimate heir, he or she in addition to the documents listed above shall provide the DGF with a notarized copy of a certificate of inheritance. In this case the payouts shall be made only on the ground of an individual written application.
Applications will be processed within a period not exceeding three calendar months.
HOW LONG CAN YOU APPLY FOR YOUR REIMBURSEMENT
The covered deposits are paid out throughout the bank liquidation period, which shall last for no longer than two years. The time-limits for bank liquidation may be extended up to two more years with the possibility of the repeated extension by up to one year. The DGF shall complete the payout of the guaranteed deposits on the day of the document submission for making record in the Unified State Register of Legal Entities of liquidation of a bank as a legal entity.
15 largest commercial banks
In terms of total assets, as of January 1, 2017
| Rank | Bank name | Total assets (UAH million) | # of branches | Website |
|---|---|---|---|---|
| 1 | PrivatBank | 220,017 | 2,240 | privatbank.ua |
| 2 | Oschadbank | 210,099 | 3,648 | oschadbank.ua |
| 3 | Ukreximbank | 160,303 | 83 | eximb.com |
| 4 | Raiffeisen Bank Aval | 55,999 | 510 | aval.ua |
| 5 | Ukrgasbank | 53,681 | 231 | ukrgasbank.com |
| 6 | Sberbank | 48,355 | 137 | sberbank.ua |
| 7 | UkrSibbank (BNP Paribas Group) | 45,367 | 378 | ukrsibbank.com |
| 8 | First Ukrainian International Bank | 44,552 | 159 | pumb.ua |
| 9 | Ukrsotsbank | 41,800 | 263 | ukrsotsbank.com |
| 10 | Alfa Bank Ukraine | 38,953 | 103 | alfabank.ua |
| 11 | Prominvestbank | 34,323 | 57 | pib.com.ua |
| 12 | Crédit Agricole | 29,895 | 156 | credit-agricole.ua |
| 13 | OTP Bank | 24,831 | 84 | otpbank.com.ua |
| 14 | Pivdennyi Bank | 20,674 | 113 | bank.com.ua |
| 15 | VTB | 20,640 | 32 | vtb.ua |
Other large commercial banks
- APEKS-BANK
- Arkada Bank
- BTA Bank
- Citibank (subsidiary of Citigroup)
- Credit Dnepr Bank
- Credit Europe Bank
- Creditwest Bank
- Deutsche Bank
- First Investment Bank
- Idea Bank (99.5% ownership in Getin Holding S.A.)
- ING Bank Ukraine
- KredoBank (99.5% ownership in PKO Bank Polski)
- Marfin Bank (99.9% ownership in Cyprus Popular Bank)
- Megabank
- Piraeus Bank
- Pravex Bank (subsidiary of Intesa Sanpaolo)
- ProCredit Bank
- SEB
- Universal Bank
- VS Bank (99.9% ownership in Sberbank Europe Group)
The total assets of Ukraine’s banking sector are estimated by the National Bank of Ukraine at $52.8 billion. The top 20 banks account for 88 percent of the sector’s assets.
