Banks to collect Ukrainians' debts automatically

Source : 112 Ukraine

The banks have started automatically collecting Ukrainians’ debts upon request of state and private executors. Seven banks have already been connected to the automatic debt recovery system, Privatbank and Monobank among them
10:57, 6 July 2021

Open source

July 6, ministerial order on banks’ right to automatically write off debts from the accounts of Ukrainians comes into force.

Beforehand, this procedure was applied only in relation to alimony debtors, now it has been extended to other types of debts. The seizure of accounts can be applied to the loan debts, alimony debts, housing and communal services, and non-payment of fines for violation of traffic rules.

The ability to automatically write off debts was provided to the following banks:

  • PrivatBank;
  • Monobank;
  • TAScombank;
  • Oxy Bank;
  • Bank Vostok;
  • Industrialbank;
  • ProCredit Bank.

If after the court decision the debtor does not return the money, then the State Executive Service or private executors can get money written off from the debtor's bank accounts. In order to arrest debtors' accounts, it was necessary to send the corresponding requests to all 73 Ukrainian banks. At the same time, banks could not disclose information about the status of the debtor's account. And if they opened it, then the performer was again forced to send documents by mail demanding to arrest the accounts.

Related: Ukraine has to pay $5.8 billion in foreign debt by end of this year

Now banks are obliged (at the request of the contractor) to provide information about the details of the debtor's accounts and the amount of funds on them. The contractor knows the sum kept on the account, however, he will be able to arrest only the required amount.

A court decision will still be required to write off funds. The write-off procedure itself is simplified, it is automated.

Procedure for debiting funds:

  1. The contractor requests from a bank information on the availability and status of the debtor's accounts;
  2. Banks (no later than one hour of working time after receiving the request) sends the relevant information to the contractor;
  3. The contractor creates and sends a resolution on the seizure of funds to the debtor’s banks;
  4. Banks seize funds in the debtor's accounts and report this to the executor using the automated seizure system;
  5. If funds are available on the debtor's account; the bank creates and sends payment requests to the appropriate banks for the compulsory withdrawal of funds;
  6. Banks forcibly write off funds from the debtor's accounts and transfer them to the accounts of the state executive service body or a private contractor.
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