“Weak link": how Pyshnyi's personnel decisions harm the NBU's reputation

National Bank of Ukraine (NBU) Governor Andriy Pyshnyi has come under fire for his excessive loyalty to his subordinates, including the heads of the NBU's departments, Oleksandr Zyma and Pavlo Polarush, who have been involved in scandals. Pyshnyi, who has been in office for more than two years, has received negative reviews for his personnel policy, which, according to experts, damages the NBU's reputation and undermines confidence in the regulator.

NBU chief lawyer compromised

In particular, Oleksandr Zyma, director of the NBU's legal department, became a defendant in a criminal proceeding on suspicion of abuse of office.

The criminal proceedings against the NBU's chief lawyer were opened due to Zyma's letter to the Deposit Guarantee Fund. In the document, Zyma, who is also the NBU's chief lawyer and chairman of the Administrative Council of the Deposit Guarantee Fund, recommended on behalf of the NBU that the Fund withdraw the lawsuits filed by Concord Bank against the National Bank of Ukraine.

It was about four lawsuits in which Concorde demanded to cancel fines totaling almost UAH 63.5 million. They were filed even before the National Bank decided to liquidate Concorde and put it under temporary administration. 

The Foundation followed the recommendation it received on behalf of the regulator. The letter contained a digital signature of Oleksandr Zyma.

According to Concorde co-owner Olena Sosiedka, Zima deprived the bank's shareholders of their constitutional right to a fair trial by his instructions. 

Currently, Zyma's case has been transferred from the SBI to the Pechersk Police Department of Kyiv for investigation. Law enforcement officials told UNNthat they plan to identify the victims and interrogate the chief lawyer of the National Bank. Also, after serving Zyma with a notice of suspicion, investigators will file a petition with the court to remove him from his duties as director of the NBU's legal department.

By his actions, Zyma, who is also the chairman of the Deposit Guarantee Fund's Administrative Board, could have called into question the independence of the Fund's management, which now has a negative impact on interaction with international financial institutions. It is possible that, for example, the IMF, due to its dissatisfaction with the situation, began to actively demand that Ukraine develop a procedure and hold an open competition for the position of the DGF Managing Director.

In addition to legal aspects, the case against Zima also calls into question the transparency of the regulator's actions, which negatively affects confidence in the banking system and can harm relations with international partners.

Despite the seriousness of the accusations, the head of the National Bank, according to experts, continues to ignore the situation and does not even initiate an internal official inspection.

Precipitate remains

Another incident concerns Pavel Polyarush, head of the NBU's distressed assets Department, who got into a scandal after threatening Belarusian volunteer Andrey Tratsevsky. Polarush, according to the military, was driving under the influence of alcohol, and law enforcement officers found weapons in his car.

According to Tratsevsky, Poliarush allegedly said that he would "buy everyone" and said in front of law enforcement officers that "all Belarusian volunteers will either go back to Belarus or kneel in Pokrovsk." Videos of the incident went viral on social media and caused outrage among users. They demanded a reaction from the NBU leadership to the incident.

The Kyiv police told UNN that they had opened criminal proceedings under the articles "threatening to kill" and "inflicting light bodily harm" and drew up a report against Polarush for driving under the influence. In addition, law enforcement officers confirmed that they had seized a weapon from the official.

Later, Polarush personally apologized to the military officer, and the parties filed applications requesting the closure of criminal proceedings. Thus, the conflict was resolved, but the question of Polarush's moral qualities and suitability for such an important position in the National Bank remains open.

Despite the public outrage and the seriousness of the conflict, the reaction from the NBU leadership was minimal. The regulator announced that it had launched an internal investigation into Polarush's behavior, but in its statement immediately hinted that the official was unlikely to be held accountable, as the conflict occurred outside of working hours and not while Polarush was performing his official duties. The National Bank did not comment on the moral side of the situation, nor did it apologize to the military and society.

Weak HR policy

Security expert Serhiy Shabovta, in an exclusive commentary to UNN, noted that he considers Pyshnyi's personnel policy to be weak and predictable. According to him, Pyshnyi was elected to the post not for his professional qualities, but because of his manageability. According to the expert, the behavior of Pyshnyi, who brought to the National Bank "dubious" people with whom he worked at Oschadbank, in particular, Oleksandr Zyma, is expected, but demonstrates his weakness.

Instead of implementing reforms, the expert believes Pyshnyi is simply acting as a tool of the government, which is designed to settle sharp corners without solving the real problems of the financial sector. Shabovta warned that "we should not expect a proper personnel policy from Pyshnyi.

For the second year in a row, the NBU governor has demonstrated loyalty to his subordinates despite serious allegations against them. This undermines the NBU's credibility and may negatively affect cooperation with international partners, including the IMF, which insists on greater transparency in the regulator's appointments and personnel policy.