The biggest Ukrainian banks are continuing to restrict cash withdrawals through ATM machines, first imposed last week, even though relative normalcy has returned to the streets of Kyiv.
Massive cash withdrawals from ATMs, which reflect a panicky mood, prompted banks to introduce these restrictions to prevent a collapse of the banking system. No one is sure when commercial life will return to normal. Representatives of several leading banks told the Kyiv Post that these measures will continue for the foreseeable future.
Starting from Feb. 19, banks began introducing different limits on the size of cash withdrawals. They varied from from Hr 800 per day in the case of PUMB to Hr 1,500 with Unicredit Bank and Hr 2,500 at Raiffeisen Bank Aval.
Some banks also restricted the number daily transactions allowed per ATM, such as 3,000 by Privatbank and 4,000 by Nadra.
Foreign currency suffered similar limits. Unicredit Bank restricted cash operations at ATMs for a single card at $1,500 per day. Cash withdrawals from ATMs of Unicredit using cards from other banks were limited to $500 per day.
Some ATMs are simply out of money.
However, bank officials cite other reasons for these restrictions. Several banks introduced tougher measures to combat cybercrime, which they feared would rise with the massive increase in bank card usage. Alfa Bank stated that it was responding to the increased activity of “cyber rogues.”
Besides, over the weekend of Feb. 22-23, several banks shut down their ATM systems altogether for “technical modernization” in order “to ensure smooth operation of the bank’s branches at maximum load,” Privatbank reports.
Feb. 21 “was the peak load on the network, according to experts of the international company serving the processing bank, and was a world record. We processed 22,000 to 36,000 transactions per minute, which the center could hardly cope with,” according to the bank.
The National Banke of Ukraine, meanwhile, is helping with short-term liquidity. On Feb. 21, the central bank decreed that – effective Feb. 24 — the minimum required reserves could be reduce from 60 percent to 50 percent maintained at the beginning of every trading day on correspondent accounts with the NBU.
The number of overnight loans made by banks was lifted. “Due to this, in the short term, banks will be able to effectively neutralize the market’s emotional outbursts, including those related to situational increasing demand for cash,” the director general of the NBU’s Department of Monetary Policy Elena Shcherbakova explained to Komersant-Ukraine.
Kyiv Post business journalist Evan Ostryzniuk can be reached at [email protected]
