The NBU is reassuring customers after another attempt to tighten banks’ control over accounts. But will it succeed
16 December 2024 12:56
NBU Governor Andriy Pyshnyi insists that the memorandum “On Ensuring Transparency of the Banking Payment Services Market” signed by several large banks does not strengthen financial monitoring of clients, but rather complicates the possibility of financing the shadow economy. The banker recently wrote about this on his Facebook page, "Komersant Ukrainian" reports.
However, experts doubt that the shadow economy will become smaller, as the new rules may push some customers away from overly picky banks and force them to transfer transactions to cash and cryptocurrency.
How banks will ensure transparency of financial transactions
The signatories of the Memorandum are Oschadbank, PrivatBank, Raiffeisen Bank, Universal Bank, and two banking associations: The Independent Association of Banks of Ukraine and the Association of Ukrainian Banks – agreed to
– to verify customers and monitor financial transactions on customer accounts;
– to ensure automation of round-the-clock rules for monitoring payment transactions with special attention to monitoring and limiting transactions at night (from 24:00 to 06:00) to identify cases of uncharacteristic financial behavior and counteract fraudulent schemes, theft of funds through social engineering, and preventing customers from participating in drop schemes (bank customers who provide access to their accounts for a fee);
– conduct financial transactions (provision of products/services) of customers in accordance with agreed approaches and procedures based on a risk-based approach;
– exchange information between the banks participating in the Memorandum on customers and their activities that contain signs of suspicion in accordance with the requirements of applicable law and NBU regulations.
Also, for customers who have problems confirming their sources of income, banks are obliged to set limits on both card account transfers and transfers using IBAN details for transactions:
from 01.02.2025 – for “high” risk customers, to set a limit of up to UAH 50 thousand per month;
for clients of “medium” and “low” risk levels – in accordance with the limits and terms of phased implementation:
from 01.02.2025 – in the amount of up to UAH 150 thousand per month
from 01.06.2025 – in the amount of up to UAH 100 thousand per month.
The limits will not include transactions for transferring funds between two accounts opened by the client in the same bank. In the absence of documented client income exceeding the established limit, banks will make transfers within the limits of the confirmed income.
In other words, such rules can hardly be considered “soft”.
The NBU comments on these rules
NBU Governor Andriy Pyshny emphasizes that banks have been applying a risk-based approach to customer assessment and, accordingly, decisions on their servicing, and will continue to do so. No additional restrictions are being introduced. And if a client works “in white,” receives a “white” salary, or can otherwise document their income or wealth, nothing will change for them at all.
According to him, the limits specified in the memorandum apply EXCLUSIVELY to clients who have not provided documentary evidence of their income, especially those defined as “high-risk”. According to the banks, the latter account for no more than 1% of the total customer base.
The new memorandum, as the NBU Chairman assured, will not affect the work of volunteers. As evidence, Andriy Pyshny mentioned that since October, the NBU has not received a single complaint from volunteer organizations regarding the restrictions imposed. Also, clients will not need to update their income data or bring any certificates to banks, as interaction with banks continues in the standard mode and the memorandum does not provide for any additional certificates or data updates by clients.
As for what the Memorandum should affect, the NBU governor hopes that the opportunities for financing the shadow economy should decrease.
“The banks’ initiative is nothing more than streamlining all the processes and approaches that already exist to prevent the payment infrastructure from being used to finance illegal activities. Today, this includes tax evasion, which is measured in billions of hryvnias that go unaccounted for in the state budget. This is financing terrorist and sabotage activities, when Russia pays for arson and explosions in our cities through drop centers. In general, this is servicing the shadow economy, which deprives Ukraine of a huge resource needed for the country’s defense,” said NBU Governor Andriy Pyshny.
What are the experts’ reservations?
For example, according to Oleksandr Khmelevsky, PhD in Economics, an independent expert, some transactions will not be possible for clients to conduct through bank accounts.
In a commentary to Glavred, he noted, in particular, that “it is often very difficult to confirm income at the appropriate level, since few people keep documents on their income, for example, for 30 years, and many companies where people used to work have now ceased operations and it is impossible to obtain a salary certificate from them.”
“Therefore, many people will refuse banking services and transfer transactions to cash and cryptocurrencies. Banks will lose significant financial flows. The shadow economy will increase,” Oleksandr Khmelevsky is convinced.
Former deputy head of the NBU Oleksandr Savchenko, quoted by the BBC, actually agrees with him.
According to him, the announced restrictions “can push people back to using cash or forward to using cryptocurrencies.”
“But cash and cryptocurrencies are absolutely useless for the Ukrainian economy,” Mr. Savchenko emphasized.
At the same time, he admits that the risks of illegal transactions will indeed decrease.
“Indeed, for a small fee, many Ukrainians lend out cards that they use to conduct illegal transactions,” stated the former deputy head of the NBU and emphasized that the above-mentioned actions of banks will reduce the risk of such transactions.
