Hetmantsev's bill on regulating the activities of the Deposit Guarantee Fund contradicts the memorandum with the IMF
Kyiv • UNN
The new draft law regarding the Deposit Guarantee Fund contradicts Ukraine's obligations to the IMF. The document expands the powers of the FGOVF and creates risks for the banking system.

The draft law initiated by the head of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, Danilo Hetmantsev, regarding changes in the regulation of the activities of the Deposit Guarantee Fund for Individuals (FGVFO) may jeopardize Ukraine's cooperation with international financial organizations. An analysis of the draft law indicates that its provisions contradict the obligations undertaken by Ukraine before the International Monetary Fund (IMF) within the framework of the current funding program, reports UNN.
Ukraine's Obligations to the IMF
According to Appendix 1 to the Memorandum on Economic and Financial Policy dated December 11, 2024, which UNN has reviewed, Ukraine has committed not to change the distribution of roles and responsibilities of participants in the financial security system during martial law. The document explicitly states:
"We will refrain from making any changes to the distribution of roles and responsibilities of participants in the financial security system during martial law. The current structure of the financial security system has largely been formed by reforms carried out under previous programs supported by the Fund (IMF – ed.), and has proven effective in times of crisis. The FGVFO plays an important role in Ukraine's financial security system, providing protection for deposits and addressing issues of insolvent banks. Therefore, we recognize that maintaining its current role in the financial security system is extremely important."
As part of cooperation with international financial organizations, in August 2024, the Financial Stability Council established a working group, which included representatives from the National Bank, the Ministry of Finance, and the FGVFO, to review the management mechanisms of the Deposit Guarantee Fund for Individuals. It should cover the composition of the Administrative Council, as well as the accountability of the FGVFO, legal protection, decision-making structures, internal control, and procedures for appointing the managing director. The latter should be appointed through an open competition.
This working group is to prepare legislative proposals to eliminate gaps in legislation by the end of March 2025. New appointment procedures should involve the engagement of an independent recruitment company to assist in the selection process and the establishment of a nomination committee consisting of voting representatives and representatives of international financial organizations as observers.
Considering that there is critically little time left to fulfill obligations to the IMF, Hetmantsev has apparently decided to seize the opportunity and "push through" a draft law in parliament that will make the Deposit Guarantee Fund a completely manual structure. Of course, all of this will be presented "under the guise" of international cooperation.
However, the draft law proposed by Hetmantsev suggests a significant expansion of the powers of the FGVFO, particularly in legislative activities and determining criteria for the liquidation of banks. This creates a risk of abuse and directly violates the obligations regarding the invariability of the structure of the financial system, enshrined in the memorandum.
Legal Uncertainty and Risks for the Banking System
The document also contradicts the roadmap for reforming the FGVFO, developed in consultations with the IMF and other international financial organizations. In particular, the proposed draft law does not contain mechanisms for controlling the activities of the fund and does not provide for the independent appointment of management. Instead, it grants the National Bank of Ukraine and the FGVFO virtually unlimited discretion in matters of withdrawing banks from the market.
In other words, Hetmantsev proposes to create a model under which the National Bank and the Deposit Guarantee Fund can implement their own rules and use their own criteria to withdraw any bank from the market without any external control. This directly contradicts the obligations undertaken by Ukraine before international financial organizations.
Particularly controversial is the provision regarding the use of so-called "FGVFO rules" instead of regulatory legal acts, which significantly complicates regulation and creates space for legal uncertainty. This approach violates Ukraine's commitments to ensure transparency in the financial sector and compliance with international standards for assessing bank assets.
Risk of Non-Transparent Asset Valuation and Threat of Corruption Schemes
The Memorandum between Ukraine and the IMF specifically emphasizes the need to reform the approach to the valuation of assets of insolvent banks. It is envisaged that the State Property Fund of Ukraine, in cooperation with the World Bank and other partners, will develop standards for the valuation of financial assets and implement a unified register of valuations.
However, the draft law proposed by Hetmantsev ignores these requirements, which may lead to mass abuses during the realization of assets of troubled banks.
Moreover, instead of creating mechanisms for profit distribution from asset operations, the project only provides for mechanisms for compensating losses, which contradicts international recommendations and may lead to non-transparent asset withdrawals for the benefit of certain banks.
Restrictions on Depositors' Rights and Increased Judicial Risks
Furthermore, Hetmantsev's draft law contains a number of provisions that directly contradict the Constitution of Ukraine regarding citizens' rights to freely own property, as well as the right to judicial appeal and a fair trial. In addition, Hetmantsev's legislative initiative violates a number of existing laws and creates significant corruption risks.
The founder of the law firm "Kasyanenko and Partners" Dmytro Kasyanenko criticized Hetmantsev's draft law regarding the limitation of the time for appealing FGVFO decisions in courts to 1 month. According to him, this contradicts the general principles of civil law and creates preconditions for abuses by responsible officials. The lawyer emphasized that this does not comply with Article 55 of the Constitution of Ukraine, which guarantees everyone the right to judicial protection, and also contradicts the practice of the European Court of Human Rights, which requires ensuring reasonable time limits for court appeals.
The head of the NGO "Independent Anti-Corruption Bureau of Ukraine" Arsen Marinuskin believes that Hetmantsev's draft law is lobbyist and is an attempt to create a convenient legal reality for the FGVFO.
"I have already observed a troubling trend in legislation, where in special laws authors try to establish a "statute of limitations" where it cannot be by definition. In my opinion, on the one hand, this is a legal manipulation to justify the Guarantee Fund for possible mistakes, and on the other hand, a fundamental misunderstanding of legal foundations," - noted Arsen Marinuskin.
Provisions that significantly reduce the rights of depositors and shareholders were not foreseen in the roadmap for the reform of the Deposit Guarantee Fund for Individuals, and their implementation increases the risks of lawsuits regarding the constitutionality of the law, posing a threat to the entire banking system of the country.
Violating agreements with the IMF in the current situation of uncertainty may negatively affect further funding for Ukraine. Given the critical role of external support in wartime, the adoption of Hetmantsev's draft law in the proposed version may lead to a review of the cooperation program or even a suspension of tranches from international partners. This would jeopardize the macroeconomic stability of the state.