Supported by the Chamber Law Amending the Conditions of Term Deposits Return Came into Force
Following the Chamber’s advocacy campaign, on June 18 Law #424-VIII “On Amendments to Certain Legislative Acts of Ukraine (regarding Conditions of Term Deposits Return)” entered into force. The Chamber welcomes this development as the aforesaid Law amends the Civil Code of Ukraine, in particular in regard to the banks’ obligation to return the deposit by delineating clients’ term deposits and demand deposits (current and card accounts, deposits without a fixed term). The Law will be applicable only to those contracts which are concluded after its entry into force.
In a course of its active advocating efforts, the Chamber Banking & Financial Services Committee and the Forum for Leading International Financial Institutions (FLIFI) held a range of events devoted to discussion of amendments to Articles 1060 and 1065 of the Civil Code of Ukraine, constantly requesting the main stakeholders about needed inclusion of the proposed amendments which could adapt deposits law to the international practices and reduce the risks of the banking system as a result of more efficient liquidity management.
As of October 2011 the proposed amendments to the Civil Code of Ukraine were included into the Strategy Paper “To Restart Lending” issues by FLIFI.
Then, since March 2014 the Chamber has conducted number of meetings with the leadership of NBU Department for Banking System Strategy and Reform and contributed with respective proposals to the first draft of the Strategy of reform of the banking system and the Comprehensive Program Development of Financial Market of Ukraine 2020.
Following the discussions and number of meetings with Ms. Valeria Gontareva, Governor of the National Bank of Ukraine and Mr. Vladyslav Rashkovan, Deputy NBU Governor, the amendments to the Civil Code were adopted as advocated by the Chamber.
We believe that this Law is a big step towards achieving the stability of banking system. However, we also understand that further legislative initiatives are needed to adapt Ukrainian financial system to international standards, ensure transparency and clean-up of the banking system as well as protection of the creditors’/investor’s rights in Ukraine.
Considering our effective ongoing dialogue with the NBU and high proficiency of the established institutional structure of the NBU, the Chamber welcomes adoption of Draft Laws #2742 and #2743 on capacity building and fiscal independence of the National Bank of Ukraine, which will stimulate further reform of the financial system based on NBU own legislative initiative and partial independence from political instability and disputes in the Ukrainian Government.