September 11, 2023
Press Release
The Deposit Guarantee Fund (hereinafter – the DGF) celebrates its 25th anniversary.
The DGF continues to successfully carry out its main mission of strengthening depositors’ confidence in the banking system, preventing bank runs even in the context of Russia’s full-scale war against Ukraine and remains one of the pillars of the financial safety-net. .
Since its establishment, the deposit guarantee system has undergone a significant evolution and continues to improve even during the war, taking into account new challenges.
In particular, the DGF:
- ensured guaranteed payout to the depositors of banks within the covered amount. Currently, the depositors of JSC ‘MEGABANK’, JSC ‘BANK SICH’, JSC ‘BANK FORWARD’, JSC ‘IBOX BANK’, and JSC JSCB ‘CONCORD’, withdrawnfrom the market after the Law ‘On Amendments to Certain Laws of Ukraine on Ensuring Stability of the Deposit Guarantee System’ containing provision on the introduction of blanket guarantees came into force, receive 100% of their deposits;
- updated loan repayment terms for the borrowers of the banks being liquidated by the DGF. The new terms were introduced with due regard to the interests of the creditors of the banks being withdrawn from the market and the difficult financial situation faced by the borrowers;
- the DGF transferred to the State UAH 26.9 billion of two Russian state owned banks – ‘IR BANK’ JSC and PSC ‘JOINT-STOCK COMPANY COMMERCIAL INDUSTRIAL & INVESTMENT BANK’ – by
- transferring to the special fund of the state budget of Ukraine the equivalent of UAH 17 billion from the accounts of ‘IR BANK’ JSC and PSC Prominvestbank;
- transferring to the special fund of the state budget of Ukraine more than UAH 8.8 billion of the funds paid on matured domestic government bonds and coupon income on government bonds owned by ‘IR BANK’ JSC;
- transferring to the State of Ukraine, represented by the Ministry of Finance of Ukraine, domestic government bonds (OVDPs) of ‘IR BANK’ JSC with a nominal value of UAH 1.1 billion.
- ensured remote payout of guaranteed compensation. Today, depositors can get the guaranteed deposit amount remotely through 5 banks – JSC CB ‘PRIVATBANK’, JSC Bank ‘UKRGASBANK’, JSC ‘PUMB’, JSC Bank ‘PIVDENNYI’ and JSC ‘TASCOMBANK’.
In addition, during the martial law, the DGF:
- continued to pay out guaranteed compensation to depositors of the banks being withdrawn from the market. As of August 1, 2023, the DGF has paid UAH 103.3 billion in guaranteed compensation to the depositors of the liquidated banks;
- continued settlements with the creditors of the banks being withdrawn from the market. As of August 1, 2023, claims of insolvent banks’ creditors totaling UAH 64.64 billion were satisfied;
- introduced remote creditor claims register formation based on the balance sheet data of banks;
- since June 2022, when the DGF auctions resumed after temporary suspension due to the outbreak of a full-scale war and consequent closure of state registers, banks being liquidated have received UAH 5.4 billion from the sale of these banks` assets (as of August 1, 2023);
- proceeds with litigation against the parties, whose actions and decisions caused losses to the insolvent banks.
Today, in the context of Ukraine’s resistance to the Russian invasion, the DGF’s work is aimed at strengthening the confidence of depositors in the banking system, laying the groundwork for recovery and further approximation of the Ukrainian deposit guarantee system to the EU standards.
For reference. The Deposit Guarantee Fund was established by Decree of the President of Ukraine No. 996/98 dated September 10, 1998 ‘On Measures to Protect the Rights of Individual Depositors of Commercial Banks of Ukraine’. In 2001, the Law of Ukraine ‘On the Deposit Guarantee Fund’ was adopted; in 2012, the Law of Ukraine ‘On the Household Deposit Guarantee Scheme’ reformed the deposit guarantee system granting the DGF additional powers of the resolution authority.
Since the DGF establishment in 1998, the amount of guaranteed compensation has increased 12 times – from UAH 500 to UAH 600,000 (moreover, for the period of martial law and three months following its termination or cancellation, deposits in the DGF member banks are guaranteed in full).