Deceived deposits: Ukrainian authorities do not want Mykhailivsky bank case to repeat

Author : News Agency

Source : 112 Ukraine

President Poroshenko has recently introduced a bill in Parliament, which aims to solve the problem of reimbursement of funds to customers of the notorious bank
10:40, 15 November 2016

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Mykhailivsky bank Ukraine

Authorities decided to help the deceived investors of the bank "Mykhailivsky". To this end, on November 11 President Poroshenko, introduced to the Verkhovna Rada as urgent a bill №5390 "On Amendments to Some Laws of Ukraine regarding the compensation to individuals through the system to guarantee individuals the harm caused by abuses in the field of banking and other financial services of deposits."

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The drafting of the document was attended by the National Bank of Ukraine, the Guarantee Fund of deposits of natural persons (GFDNP), the Ministry of Finance, and law enforcement agencies. The project proposes to amend the laws "On the system of guaranteeing deposits of individuals," "On Banks and Banking Activity," and "On Financial Services and State Regulation of Financial Services Markets."

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At a meeting with investors of "Mykhailivsky" Poroshenko addressed the people's deputies with a request to put the document to a vote on Tuesday, 15 November, and to accept it as a law.

At the same time the speaker of Parliament Andriy Parubiy said at today's meeting of the conciliatory council that the bill tomorrow may be included in the agenda, it can be considered at a meeting on Thursday, 17 November.

As noted in the explanatory memorandum to the draft legislation, recently was extended scheme by which a bank in the premises of the citizens of Ukraine proposed to conclude no bank deposit agreements with bank and loan agreements with non-bank financial institutions by proxy, which is a bank. In this case with a view to introducing consumers misleading as to the real subject of the agreement the bank opens each client account from which funds are transferred further on account of the above non-bank financial institutions. According to GFDNP, 14 thousand individuals were deceived by "Mykhailivsky Bank" for a total amount of 1.5 billion hryvnia.

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According to the authors of the bill №5390, its adoption will contribute to the protection of the rights of individuals, defrauded through the mediation of banks, including the Bank's customers, "Mykhailivsky", by providing them with the Law of Ukraine "On the system of guaranteeing deposits of individuals' deposits and guarantees will create preconditions for the prevention of such occurrences in the future.”

The bill proposes to equate to a contribution of funds attracted from physical persons as a loan or contributions to non-banking financial institutions through the Bank, who spoke attorney under the contract and the date of entry into force of the adopted law is declared insolvent, if the bank failed to inform natural persons under painting on non-proliferation of such funds guarantees provided by the law "On the system of guaranteeing deposits of individuals".

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Guarantee Fund of deposits of natural persons will be tasked to study carefully the documents in respect of each physical persons, which is likened to the depositor. It means, the contribution, and not later than 20 working days from the date of entry into force of this bill to begin disbursement of compensation to individuals who have received the right to such compensation. GFDNP also be able to file claims to the non-bank financial institution, which attracted from individuals in the form of loans or deposits funds equated to contributions. The funds collected from these financial institutions will be included in the mass liquidation of the corresponding bank.

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In the event that such a requirement, and the requirement GFDNP to Bank-related person acts or omissions that led to the infliction of the creditors, the bank damage or that as a result of such acts or omissions directly or indirectly obtained property benefit, will not be executed, the bill provides for an appeal Fund with such requirements to the court and mandatory arrest of funds and property of persons to whom such requirements are stated.

In addition, the bill prohibits the financial institution to raise funds of natural persons (except for members of the institution) with an obligation to return, including through a loan, if it is not expressly provided for by law on the activities of the relevant financial institution. It is also proposed to ban banks to no reflection in their liabilities and assets operations by raising funds of individuals with a view to their direct placement in loans.

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The draft legislation also requires banks in the performance of functions of the attorney, agent or other representative or agent to raise funds from individuals in favor of third parties (including non-bank financial institutions) previously inform in writing those individuals that such funds are not bank deposits, on which is subject to the safeguards of the law "On the system of guaranteeing deposits of individuals".

Head of GFDNP Constantine Vorushilin called for the adoption of the draft law №5390. According to him, in this case, the fund will be able to individually work every statement of defrauded investors, within a guaranteed return scrip means the vast majority of bank customers "Mykhailivsky".

Vorushilin noted that the total amount of payments of GFDNP to depositors of "Mykhailivsky" in the case of the adoption of the law will be more than 1.2 billion UAH. Deposits will be refunded almost 14 thousand man in a period not later than 20 days from the date of entry into force of the law.

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Meanwhile, today in the National Bank of Ukraine held another protest rally depositors of "Mykhailivsky", in which Institutska Street was completely blocked.

The Security Service of Ukraine has stated that this meeting is part of a Russian plan to destabilize the situation in Ukraine.

PJSC "Bank Mykhailivsky"was declared insolvent and transferred to GFDNP May 23, 2016 after the temporary administration of the bank July 13 has been revoked license and started its liquidation. Payments guaranteed compensation to depositors of the bank began on July 15. As reported by GFDNP, as on November 14, 2016 was paid 1.27 billion USD (96% of the registry).

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In the process of formation of the registry for payments to depositors and inspections of "Mykhailivsky" contracts Fund revealed that a significant number of customers have been victims of fraudulent schemes, because the bank is not concluded with a bank deposit agreements and loan agreements with finance companies. Accordingly, such funds do not fall under the state guarantees.

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