Due to the lack of proper judicial control over the National Bank of Ukraine and the deposit guarantee fund, they violate the rights of bank owners, including the peaceful possession of their property. The only way to protect the rights of shareholders of a liquidated bank is to apply to the court for damages. This opinion was expressed in an exclusive comment to UNN by Dmitry Tilipsky, a lawyer and adviser to EQUITY Law Firm.
Details
Recently, the Dnipropetrovsk District Administrative Court declared illegal and overturned the decision of the National Bank of Ukraine to revoke the license and liquidate Concord bank. Thus, the bank's liquidation was declared illegal.
Now the legislator has essentially removed the NBU and the DGF from judicial control, prohibiting checking the legality of their actions to withdraw commercial banks from the market. Accordingly, the absence of such judicial control leads to abuses on the part of these authorities, violating the fundamental rights of the bank's owners, including the right to peaceful possession of their property. Broad discretion in authority without proper control is always a field of opportunity for violations,
The lawyer explained that the latest radical reform of the banking legislation was the adoption of the law of Ukraine "on amendments to certain legislative acts of Ukraine concerning the improvement of banking regulation mechanisms". However, neither this law nor other legislative acts solved the existing problems and did not help to achieve a balance between protecting the rights of depositors and the state on the one hand and the rights of bona fide shareholders of banks on the other.
This law significantly restricted shareholders in protecting their rights in cases related to the withdrawal of commercial banks from the market, appealing against procedures for the introduction of temporary administration and liquidation of banks. In particular, the grounds for judicial review of decisions of the NBU and the DGF were narrowed, and the use of certain methods of protection that could be effective was limited.
Also, according to this law, the procedure for withdrawing a bank from the market cannot be stopped or canceled even if a corresponding Court decision is received, which would establish the illegality of individual decisions of the NBU and the DGF.
Therefore, even if the NBU mistakenly introduces a temporary administration/liquidation of a bank that is financially capable and meets the standards, such a decision cannot be stopped and canceled. Of course, from the point of view of protecting the interests of persons affected by the results of illegal actions of the NBU and the DGF, this is unacceptable,
In addition, according to him, the current version of the law of Ukraine "on the deposit guarantee system of individuals" also contains gaps in legislative regulation in the field of withdrawal of an insolvent bank from the market and its liquidation in the context of legal relations between its shareholders and the regulator.
The only way to protect the bank's shareholders, which is proposed by the current legislation, is to file a claim for compensation for damage caused by illegal actions of the NBU and the DGF,
The lawyer stressed that everyone whose rights have been violated has the right to an effective remedy, which will have the greatest effect. That is, an adequate restoration of the violated right must be ensured.
One of the most effective ways is to restore the bank's functioning and return it to its shareholders (owners) in the form of illegal procedures for withdrawing the bank from the market as of the time of introduction,
In his opinion, the legislation on the withdrawal of banks from the market should be reviewed and ensure the rights of everyone: the bank, depositors and the state.
Recall
Despite the war in Ukraine, the process of withdrawing banks from the market has not stopped. So, since February 24, 2022, the liquidation process has been started for 8 banks. Last year, for the first time in Ukraine, not only bankrupt banks, but also profitable institutions were liquidated and revoked-We are talking about Concord bank. The process of revoking a banking institution's license takes place without a court order. Of course, the owners and shareholders of banks can appeal the decision of the regulator - the NBU, after it makes a decision to liquidate the bank, however, in general, the process of withdrawing a banking institution from the market, if it is launched, is irrevocable.
In addition, the issue of conducting liquidation of a profitable bank has not been resolved in Ukraine. As stated by co-owner of Concord bank Elena Sosedka, at the time of the regulator's announcement of the decision to liquidate the bank, there were enough highly liquid assets in the financial institution to make all the necessary payments in 2-3 weeks. But the bank's liquidation process is strictly regulated by law and can generally last up to three years.