Lawyer: NBU Legal Department has no authority to give recommendations to DGF

The Legal Department of the National Bank of Ukraine did not have the authority to write a letter with recommendations to the Deposit Guarantee Fund. Therefore, the actions of the director of the department, Oleksandr Zyma, are seen as illegal interference in the work of the DGF. This opinion was expressed by lawyer Stanislav Batryn in an exclusive commentary to UNN.

Earlier, UNN learned from its own sources that the State Bureau of Investigation opened a criminal proceeding on the fact of possible abuse of power or official position, which led to serious consequences, by the director of the National Bank's legal department, Oleksandr Zyma. The criminal case concerns a letter from the NBU to the DGF signed by Zyma, who is also the chairman of the administrative board of the Deposit Guarantee Fund. In the letter, he recommended that the DGF drop four lawsuits filed by Concorde Bank against the NBU before the decision to liquidate the bank and introduce a temporary administration was made. The DGF implemented Zyma's recommendation.

The actions of the NBU's legal department go beyond the scope of the current substantive and procedural legislation. The available letter does not contain any reference to the regulatory framework that would authorize the head of the department to behave in this manner

At the same time, he said, the National Bank's letter signed by Zyma to the Deposit Guarantee Fund cannot be advisory.

"On the other hand, it is impossible to say that such a letter is advisory in nature, since certain recommendations can also be provided provided that the person providing them has the necessary competence to take such actions. Summing up, I see in such actions signs of interference that is not based on the law, which contradicts Article 19 of the Constitution of Ukraine," Batryn said.

He emphasized that law enforcement officers should verify these facts and provide an appropriate response within the framework of the procedure established by law.

Recall

Despite the war in Ukraine, the process of removing banks from the market has not stopped. Thus, as of February 24, 2022, the liquidation process was initiated against 8 banks. This year, for the first time in Ukraine, not only bankrupt banks but also profitable institutions were subject to liquidation and license revocation, including Concord Bank. The process of depriving a banking institution of its license takes place without a court. Of course, the owners and shareholders of banks may appeal the decision of the regulator, the NBU, after it has made a decision to liquidate the bank, but in general, the process of withdrawing a banking institution from the market, once it has been launched, is irreversible. 

In addition, the issue of liquidation of a profitable bank has not been regulated in Ukraine. According to Olena Sosedka, co-owner of Concord Bank, at the time the regulator announced the decision to liquidate the bank, the financial institution had enough highly liquid assets to make all the necessary payments in 2-3 weeks. But the process of bank liquidation is strictly regulated by law and can generally take up to three years.