On 14 December the
newssite Kommersant Ukraine revealed that the National Bank of Ukraine (Національний
банк України) is considering instituting higher deposit-insurance premium rates
for banks that offer interest rates for deposits denominated in Ukrainian
hryvnia (UAH) that are significantly higher than average market rates. (1 EUR = 10.67 UAH at time of writing.)
[N.B.: At present, interest rates for new medium-term retail deposits denominated
in UAH are extremely high, with a large number of banks offering rates of
26-28% per annum on deposits of 1,000 UAH (€ 94) or more, typically with a
maturity of 2-4 months. In contrast, the
highest rates being offered in Ukraine
Analysts
interviewed by Kommersant Ukraine attribute the high rates offered for
medium-term-maturity UAH deposits to uncertainty on the part of the market regarding
the future course of the hryvnia, uncertainty which they blame on government
policy makers. But Oleksii Tkachenko, Director
of the General Department of Banking Supervision at the National Bank, asserts
that the offering of such high rates by banks is risky, and states that the
National Bank is considering imposing higher deposit-insurance premiums on such
banks to balance out or reduce the risk.
And Olena Sharova, Managing Director of Ukraine’s Deposit Guarantee Fund
(Фонд гарантування вкладів фізичних осіб – ФГВФЛ) added that it is banks with
impaired liquidity that need to offer higher interest rates to raise funds, and
this increases the risk of bankruptcy on their part. The current flat-fee premium system does not compensate
the Fund for the increased risk of bankruptcy and payout for these banks, she
says, so it is fair that depositors at these banks bear a part of the cost of
the increased risk to the Fund.
Source:
Mark Pleas
[contact]
