The Ukrainian government has regulated the provision of state financial aid to credit and financial institutions, empowering the expert and analytical council for the state's participation in the capitalization of banks to consider proposals from the Finance Ministry.
The procedure is stipulated in cabinet resolution No. 1066, which has been posted on the Web site of the government.
According to the document, a final decision on the provision of state aid is made by the government.
A bank, to which the assets or liabilities of a financial institution with temporary administration are transferred, including a bank for bad assets, can obtain state aid.
State aid can be provided using funds from the national budget or through a transfer of government bonds.
A bank that receives state aid has to have carried out banking operations at least for two years, it is to be a member of the Individuals’ Deposits Guarantee Fund (apart from Oschadbank), meet the economic requirements set by the National Bank of Ukraine and fulfill its liabilities to clients on time.
"The size of state aid is to take into account the fact that it cannot exceed the difference between the value of liabilities to individual depositors of the bank with a temporary administration within the sums that are to be refunded by the Individuals’ Deposits Guarantee Fund, and the value of the assets transferred to the other bank," reads the document.
