Ukrainian banks can be taken over for 2 cents — RT Business News
New law allows government to buy any lender it deems ‘insolvent’, official statement says
Ukrainian President Vladimir Zelensky has signed a decree that will allow the nationalization of strategic banks if they are deemed insolvent, according to a document published on the parliament’s website on Wednesday.
The legislation allows banks declared insolvent to be bought out for a nominal price of 1 hryvnia (less than $0.03) and then nationalized. Currently, 14 banks are classified as systemically important in Ukraine, a list that includes both private and public financial institutions.
« The state, represented by the Ministry of Finance of Ukraine, participates in the withdrawal from the market of a systemically important bank if the National Bank of Ukraine decides to classify it as ‘insolvent' », read the statement.
Once the central bank recognizes that a bank is insolvent, it is required to inform the lender itself, as well as the government. The decision to nationalize a bank will be taken by the Cabinet of Ministers.
Once a lender is declared « insolvent », it will be sold for 1 hryvnia, regardless of the actual size of the bank’s regulatory capital. If the bank is shown to be worth more than one hryvnia, the law provides that shareholders will be reimbursed from Russian compensation for damage caused in Ukraine.
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