Five banks in Ukraine seize to operate after imposition of Presidential sanctions

Kiev, Ukraine: Five leading banks of Ukraine having around half a million individual and corporate account holders have seized their working after Ukrainian President Petro Poroshenko imposed sanctions on them on Thursday.

These five banks were working with Russian capital.

According to a statement issued on the presidential website on March 16, banks include Sberbank, VS Bank, Prominvestbank, VTB Bank, and BM Bank for a one-year period.

Meanwhile, Russian authorities have responded to sanctions and called them “against international law”.

“The actions against Russian banks’ subsidiaries in Ukraine contradict international law, and Moscow will take all legitimate measures to protect them if necessary. We are closely monitoring the situation and will, if necessary, support and protect with all available and legitimate means the interests of our credit and financial institutions,” “, said Kremlin spokesman Dmitry Peskov while talking to reporters after Kiev announced sanctions.

VS Bank was working in Ukraine for the last 25 years dealing over 80, 000 individual and corporate customers through its 38 branches in Ukraine.

Prominvestbank was one of the leading banks in Ukraine and was operating in 11 provinces (oblasts).

BM BANK JSC was operating 17 branches in Ukraine. The company was founded in 2005 and is headquartered in Kyiv.

Sanction was proposed by the National Security and Defense Council of Ukraine and the National Bank of Ukraine (State Bank of Ukraine) because all these Ukrainian banks had Russian state capital.

In an official statement issue by National Bank of Ukraine, it is said that sanctions aimed to protect the interests of customers and prevent the outflow of capital from Ukraine.

sberbankThe sanctions prohibit any financial transactions involving the transfer of funds to banks’ related parties,  particularly parent banks, transactions that are carried out directly or indirectly  (the provision of interbank loans,  deposits, subordinated debt, securities purchases, depositing funds in correspondent accounts, dividend and interest payments, repayment of interbank loans/deposits, withdrawal of funds from correspondent accounts, repayment of subordinated debt, profit distribution and allocation of capital.

Five leading banks of Ukraine seize to operate after imposition of Presidential sanctions
Five leading banks of Ukraine seize to operate after imposition of Presidential sanctions

National Bank of Ukraine (NBU) has taken over the charge as “Regulator” of these banks  and put them under the NBU curatorship.

The proposal to introduce sanctions was made by the National Security and Defense Council on March 15.

 

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