National Bank of Ukraine (Ukrainian: ???????????? ???? ???????) is the central bank of Ukraine. Its headquarters building, constructed between 1902 and 1934, is located at 9 vulytsia Institutska (Institute Street), in Kiev.
History
Banking in Ukraine traces its history back to 1918 when on December 22, 1917 the Central Council of Ukraine adopted a law "On transformation of the Kiev office of the Russian State Bank into the Ukrainian State Bank". The law united all offices of the former State bank, Noble Land Bank, and Peasant Land Bank. At the same time there existed a decree of the Central Executive Committee of Ukraine about the nationalization of banks since December 14, 1917. On January 5, 1918 the Ukrainian State Bank started to issue its own money. On August 10, 1918 there was signed a statute on the Ukrainian State Bank. On August 23, 1918 there was established the State Land Bank.
At the end of the World War I, Ukraine became occupied by a new Russian regime - Bolsheviks. The Bolshevist Russia adopted a law of War Communism which discontinued use of any financial institutions. However in 1921 across Ukraine started to be established State Banks of the Russian SFSR which later were transformed into the Central Bank of the USSR.
Before the fall of the Soviet Union during the times of perestroika, the National Bank of Ukraine was a republican branch of the Central Bank of the USSR, while there were registered number of banks with various status. There were over 15 banks of ministerial status, over 20 banks of state/cooperative institutions, Moscow banks in Ukraine, banks with state status. Officially, the National Bank of Ukraine acted as the Central Bank of Ukraine since early 1991 (while part of the Soviet Union). Like institutions of many newly independent nations, it faced dire financial straits during the 1990s, leading to a prolonged period of hyperinflation.
On March 20, 1991, the Verkhovna Rada of Ukraine adopted the resolution "On Banks and Banking Activity", which became Law on May 1. The resolution declared ownership by the Ukrainian SSR of the Ukrainian Republican Bank of the State Bank of the USSR (later National Bank of Ukraine), the Ukrainian Republican Bank of the State Commercial Industrial-Constructional Bank of the USSR "Ukrprombudbank", the Ukrainian Republican Bank of the Savings Bank of the USSR, and the Ukrainian Republican Bank of the ForeignEconomBank of the USSR as well as the Ukrainian Republican Department of Encashment of the State Bank of the USSR.
Former President of Ukraine Viktor Yushchenko was Governor of the National Bank of Ukraine from January 1993 to December 1999, before becoming Prime Minister.
Legal status and structure
The legal status of the National Bank of Ukraine and the principles of its organization and activities are determined by the Constitution of Ukraine and the Law of Ukraine "On the National Bank of Ukraine"[1].
The National Bank of Ukraine is a legal entity with separated property, which is the object of the state property. Its authorized capital amounts to UAH 10 million and is the state-owned property which is in the full economic competence of the National Bank.
According to Article 99 of the Constitution of Ukraine, adopted in 1996, the main function of the country's central bank is to ensure stability of monetary unit - the Hryvnia. To carry out its main function, the National Bank shall foster the stability of the banking system and, within its competence, the price stability.
According to the Law of Ukraine "On the National Bank of Ukraine", the National Bank is the central bank of Ukraine, a specific central body of the state administration, its issuing center which pursue common state policy in money circulation, credit, strengthening of monetary unit; it coordinates functioning of the banking system in general; determines exchange rate of the monetary unit against foreign currencies. The National Bank determines a kind of bank notes, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals. The National Bank of Ukraine sets up the order of determining a discount rate and other interest rates; it gives permission for commercial banks' registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions.
The National Bank of Ukraine has the power to initiate legislation.
The National Bank of Ukraine is governed by the Head of the National Bank of Ukraine and its directory, while its functions are coordinated by the Council of the National Bank of Ukraine. The council consists of 15 members including the Head of the National Bank as the ex officio position. The other members of the council are appointed by an equal quota of seven members from the President of Ukraine and the Verkhovna Rada.
Functions
According to the Constitution of Ukraine, the main function of the National Bank is to ensure the stability of Ukraine's monetary unit. To carry this out the National Bank fosters the stability of the banking system and, within its competence, price stability.
The National Bank also carries out the following functions:
- to determine and pursue the monetary policy in accordance with the General Principles of the Monetary Policy developed by the Council of the National Bank of Ukraine;
- to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;
- to establish the rules of conducting banking transactions, accounting and reporting, protection of the information, funds and property for the banks and other financial and credit institutions;
- to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;
- to determine the areas of the development of modern electronic banking technologies, to establish, co-ordinate and control the creation of electronic means of payment, payment system, banking automation and the banking information protection facilities;
- to exercise the banking regulation and supervision;
- to keep a Register of banks, their branch and representative offices, currency exchanges and financial and credit institutions, to license banking business and transactions, if provided for by the laws;.
- to compile, analyze and forecast the balance of payments;
- to represent Ukraine's interests in central banks of other states, international banks and other crediting institutions, where the cooperation takes place at the level of central banks;
- to exercise the currency regulation with the competence to be defined by a special law, to determine the procedure of effecting payments in the foreign currency, to organise and exercise the currency control over the commercial banks and other credit institutions which are in possession of a National Bank's license for the transactions with currency values;
- to ensure the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals;
- to analyze the status of the monetary, crediting, financial, pricing and currency relations;
- to organize the collection and transportation of bank notes, coins and other values;
- to implement the national policy of the protection of state secrets within the system of the National Bank;
- to take part in the training of personnel for Ukraine's banking system;
- to exercise other functions in the monetary and crediting sphere within its competence defined by the law.
Governors of the National Bank of Ukraine
Since the Banks' establishment, the following statesmen were the Governors of the National Bank of Ukraine (initially the title of the position was the Chairman of the Board of the National Bank of Ukraine)
On 24 February 2014, just after the "Maidan revolution", the Verkhovna Rada dismissed Ihor Sorkin as governor of the National Bank of Ukraine and replaced him with Stepan Kubiv. Kubiv himself was replaced by Valeriya Hontaryeva on 19 June 2014. Hontaryeva is the first female to lead the bank.
Council of the National Bank of Ukraine
- Iryna Akimova - Presidential decree (2010)
- Serhiy Arbuzov - ex officio
- Pavlo Haidutsky - Presidential decree (2010)
- Valeriy Heyets - Presidential decree (2005)
- Mykhailo Honcharov - Verkhovna Rada declaration (2007)
- Vasyl Horbal - Verkhovna Rada declaration (2007)
- Serhiy Klyuev - Verkhovna Rada declaration (2007)
- Borys Kolesnikov - Verkhovna Rada declaration (2007)
- Yuriy Polunyeev - Verkhovna Rada declaration (2008)
- Petro Poroshenko - Verkhovna Rada declaration (2007)
- Andriy Portnov - Presidential decree (2010)
- Ihor Prasolov - Verkhovna Rada declaration (2007)
- Viktor Fedosov - Presidential decree (2010)
- Valeriy Khoroshkovskiy - Presidential decree (2010)
- Roman Shpek - Presidential decree (2010)
Banking sector
There are more than 180 banks under the supervision of the NBU. Banks are divided into four categories depending on their capitals. Since the fall of the Soviet Union there still exist few state banks. There are couple of big banks owned through off-shore companies. Foreign banking is predominated from the Russian Federation, while the Austrian Raiffeisen Bank continues to stay strong.
State banks
- State Savings Bank of Ukraine (Oshchadbank) (State bank)
- Ukreximbank (State bank)
- Ukrayina (State bank, bankrupt)
- UkrHazBank
- Rodovid Bank (formerly a commercial bank)
Commercial banks
- PrivatBank (Henadiy Boholyubov - 33.9%, Ihor Kolomoisky - 33.8%, Triantial Investments Ltd - 25%, others - 7.3%)
- Finances and Credit (Kostyantyn Zhevago - 96.5%, others - 3.5%)
- Delta Bank (Mykola Lahun - 70.6%, Cargill - 29.4%), included UkrPromBank, Swedbank (Ukraine), KreditPromBank
- Nadra Bank (Dmytro Firtash and Grenar Enterprises Ltd. (90/10) - 90%, others - 10%)
- VAB Bank (Oleh Bakhmatyuk - 82.7%, Kirkville Management Limited - 5.3%, others - 11.8%)
- First Ukrainian International Bank (SCM Holdings - 100%)
- BrokBiznesBank (VETEK - 80%)
- Imexbank
Foreign banks
- Raiffeisen Bank Aval (formerly Aval, subsidiary of Raiffeisen Bank International)
- OTP Bank (Ukraine) (formerly Raiffeisen Bank Ukraine, subsidiary of OTP Bank)
- BNP Paribas (Ukraine) (formerly UkrSibbank, subsidiary of BNP Paribas)
- Index Bank (subsidiary of Crédit Agricole)
- PromInvestBank (formerly state bank, now through Vnesheconombank)
- Alfa-Bank (Ukraine) (subsidiary of Alfa-Bank)
- VTB Bank (Ukraine) (subsidiary of VTB Bank)
- Sberbank Rossii (Ukraine) (subsidiary of Sberbank)
- UniCredit Bank (Ukraine) (subsidiary of UniCredit)
- Pravex Bank (subsidiary of Intesa Sanpaolo)
- Creditwest Bank Ukraine (subsidiary of Altinbas Holding)
Off-shore owners
- Fidobank (formerly SEB Bank (Ukraine) and others, through Ignace Marketing)
- Bank Forum (through Yernamio Consulting Ltd. (98.7%) by Vadym Novinsky) (formerly a subsidiary of Commerzbank )
Melitopol offensive anniversary
On October 2013, the National Bank of Ukraine has introduced a new commemorative silver coin on the 70th anniversary of the Melitopol offensive against German troops and the liberation of the city of Melitopol on October 23, 1943. The new coin is called "The Breakthrough of Soviet Troops Against the German Defense Line Wotan and liberation of Melitopol" and each of the 30,000 limited edition coins is worth $5.
See also
- National Bank of Ukraine building
- Ministry of Finance (Ukraine)
References
Dushkevych, N. and V. Zelenyuk (2007) "Banking in Ukraine: Changes Looming?" Beyond Transition Newsletter 17:2, (The Newsletter About Reforming Economies, THE WORLD BANK, 2007).
- (Ukrainian) ??? ????? ? ?????????? ??????????. Law of Ukraine. March 20, 1991.
- (Ukrainian) ??? ????? ? ?????????? ??????????. Law of Ukraine. Accessed on August 17, 2006.
- (Ukrainian) ??? ???????????? ???? ???????. Law of Ukraine. Accessed on August 17, 2006.
External links
- Official website (Ukrainian) (English)
- (English) Government portal of Ukraine - National Bank of Ukraine
- ??? ?????? ??? ????????? ??????? ???? (?.4 ??????????) (All truth about financial system of the USSR (P.4: Perestroika))
- Melnyk, P., Tarahul, L., Hordei, O. Banking system of Russia. Banking systems of foreign countries (handbook). 2010.
- Creation of the Russian banking system
- Kostyuchenko, O. Creation and evolution of banking in Ukraine. Banking Law. 2011.
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