On regulation of activities of financial institutions and currency transactions

Resolution No. 328 of the Management Board of the National Bank of Ukraine dated 30 May 2014 (the “Resolution”)

The Resolution prolongs the effect of many temporary restrictions on currency exchange transactions and other transactions in the currency market, already introduced earlier by the NBU, as well as introduces several new restrictions.

This Resolution was adopted to replace the earlier “anti-crisis” Resolution of the NBU No. 245 dated 29 April 2014, as amended, which now expires.

As before, the Resolution sets a ban on pre-repayment of credits and loans in a foreign currency under agreements with non-residents (both the principal amount of the credit/loan and other payments). The Resolution also prolongs the restriction on registration by NBU of amendments to agreements that would attempt to reduce repayment terms and duration of borrowings.

In addition, already established restrictions continue to remain in force, namely: on foreign currency transfers abroad made on behalf of private individuals and on cash withdrawals made in a foreign currency from current and deposit accounts of clients through cash-desks and ATMs, limits on sales of foreign currency to private individuals in the cash market, as well as the zero rate for funds reservation under agreements on attraction by the banks of funds in foreign currency from non-residents.

At the same time the Resolution has expanded the list of exemptions from restrictions on foreign currency transfers abroad made on behalf of individuals.  The Resolution now also provides that the restrictions do not apply to payments of expenses to foreign courts, investigative, notarial and other competent authorities (including the payment of taxes and other mandatory payments).

The Resolution has also introduced a provision allowing banks, which did not comply with the requirements on formation and preservation of mandatory reserves in the relevant accounting period for reservation, to carry out their own operations on purchase of foreign currency on the interbank currency market in Ukraine in order to repay deposits to individuals (including interests on deposits), which become due and payable. 

In addition, the Resolution introduces a new restriction – on cash withdrawals made in national currency from current and deposit accounts through cash-desks and ATMs of up to UAH 150,000 per day per client. This restriction does not apply to salary payments, business trip expenses, pensions, scholarships and other social payments, as well as to cash withdrawals from current and deposit accounts in cases where they were initially deposited in cash and only up to the amounts originally deposited. 

The Resolution is effective as of 1 June 2014 and remains in force until 1 September 2014 (except for certain provisions provided for by the Resolution).