Zelensky signs law: minimum bank capital rises to UAH 250 million

The Ukrainian banking system is moving to a new level of regulation. President Volodymyr Zelensky has signed a law establishing heightened requirements for financial institutions and collective investment institutions. The key change is the increase in the minimum charter capital for banks.

Raising requirements for financial stability

The main objective of the adopted legislative act is to strengthen the reliability of the banking sector, ensure the protection of client funds, and harmonise Ukrainian law with European Union standards.

Under the new rules, the minimum size of a bank's charter capital increases from 200 million hryvnia to 250 million hryvnia. Existing financial institutions have been given a six-month period to bring their metrics into compliance with the updated requirements.

New mechanism for exiting problematic banks

The document significantly changes the approach to dealing with insolvent financial institutions. If the primary instrument was previously the liquidation of a bank, the Deposit Insurance Fund for Individuals must now prioritise transferring the client base and functioning services to a reliable financial institution. The liquidation process begins only after this stage has been implemented.

The law also clearly delineates the powers between regulators and expands the volume of information that the National Bank of Ukraine exchanges with the Deposit Insurance Fund.

Strengthening cyber protection and NBU powers

The National Bank of Ukraine has received additional tools to ensure the security of the financial sector. In particular, the regulator:

• officially establishes a Cyber Protection Centre, which includes the Computer Security Incident Response Team CSIRT-NBU;
• introduces a system for assessing the level of cyber protection for banks and payment systems;
• gains the right to make decisions on withdrawing old-design banknotes and coins from circulation, as well as determining the deadlines for their exchange.

Changes for investment funds

The new law abolishes the requirement for a mandatory minimum entry amount for individuals into qualified investment funds. This is expected to simplify access to collective investment instruments.

The collective investment institutions themselves have gained new opportunities for development:

• the right to purchase Treasury bonds (OVDP) to form safer investment portfolios;
• the ability to merge and attract loans for development, with the limit increased from 10% to 30%;
• the right to change the nominal value of their own securities.