Attempts To Implement Civilised Standards In Banking Supervision Create Yet Another Bureaucratic Barrier

Following demands from international financial and other organisations, new shareholder control procedures during acquisition of (direct or indirect) participation in Ukrainian banks and other financial institutions have recently been adopted. One question remains: Does the international community really want what was adopted?

Changes to the Banking Law

On 17 June 2011, changes to the Law of Ukraine onBanks and Banking Activity (Banking Law) entered into force. Pursuant to the new wording of Article 34 of the Banking Law, a person intending to acquire direct or indirect material (ie, 10, 25, 50 and 75%) participation in a Ukrainian bank must apply to the National Bank of Ukraine (NBU) for approval of the acquisition at least three months before the acquisition. The shareholder control approval requirement is not new; these amendments have just further detailed the approval procedure and made it much stricter.