You're reading: Ukrainian Credit-Bank Union: NBU’s supervision powers strengthened needlessly

The National Bank of Ukraine (NBU) has unjustifiably expanded its supervision powers, approving unfair new wording of the procedure for carrying out inspectorate checks, according to the Ukrainian Credit-Bank Union (UCBU).

"The procedure does not contain a clear list of grounds for establishing off-schedule checks, and there are preconditions for the appearance of misunderstanding between the banks and supervision bodies. It was proposed to compose an exhaustive list of the grounds under which the NBU should assign the checks," reads a press release of the association.

A resolution on the procedure for holding inspectorate checks is stipulated in NBU resolution No. 366 of October 13, 2011, which took effect on January 10, 2012.

The association said that the term of the checks set in the resolution is one of the largest compared to other supervision bodies: the association proposed to reduce them from 60 to 30 days.

In addition, it is proposed to introduce the requirement for written obligations from supervisory persons on the non-disclosure of information regarding the operations of the organization being checked: taking into account the new rules, checks can be conducted by any empowered person, while earlier only an employee of the NBU could be a supervisory person.

The association also said that the NBU did not foresee a procedure for checking the powers of NBU inspectors.

"The association’s experts said that it is unacceptable that the banks do not have the right to refuse the conducting of checks, so the UCBU proposes not to allow checks if the terms of the preliminary notification are broken or improper drawing up of documents is seen," reads the release.

According to the report, the resolution does not regulate the procedure for NBU inspectors’ gaining access to premises of credit and financial institutions with restricted access.

The association proposed to do this only in the presence of empowered persons at banks and observe the requirements of banks’ internal rules.

In addition, the representative of the banking sector believe that the taking out of copies of documents, which were given for checks and are not related to infringements revealed by inspectors, should be banned.

The association also drew the attention of the NBU to the fact that the new resolution was not published in preliminary form for the submission of proposals from banks.