RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of August 28, 2001 No. 368

About approval of the Instruction about procedure for regulation of activities of banks in Ukraine

According to requirements of the Laws of Ukraine "About the National Bank of Ukraine" and "About banks and banking activity" and for the purpose of ensuring stable activities of banks and timely accomplishment of obligations to their investors by them the Board of the National Bank of Ukraine DECIDES:

1. Approve the Instruction about procedure for regulation of activities of banks in Ukraine it (is applied).

2. To general department of banking supervision (P.V.Andrushchenko) and Department of informatization (A. S. Savchenko) till 01.10.2001 to make corresponding changes to program complex of the automated calculation of economic standard rates and to timely bring it to permission of territorial administrations of the National Bank of Ukraine and banks.

3. To banks to accept the finished program complex of the automated calculation of economic standard rates in accomplishment and since 01.11.2001 to carry out its trial operation.

4. Since 01.01.2002 banks perfrom calculation of prudential standard rates according to the Instruction about procedure for regulation of activities of banks in Ukraine approved by this resolution.

5. To general department of banking supervision (P.V.Andrushchenko) and territorial administrations of the National Bank of Ukraine since 01.01.2002 to exercise control of observance of obligatory economic standard rates by banks on new program complex according to the Instruction about procedure for regulation of activities of banks in Ukraine approved by this resolution.

Till 01.01.2002 banks shall observe economic standard rates according to the Instruction about procedure for regulation and the analysis of the activities of commercial banks approved by the resolution of Board of the National Bank of Ukraine of 14.04.98 No. 141 and the corrective action registered in the Ministry of Justice of Ukraine 15.05.98 for No. 323/2763, for violation of which shall be applied according to Chapter 7 of the Regulations on application by the National Bank of Ukraine to banks and other financial credit institutes of corrective actions for violation of the bank law approved by the resolution of Board of the National Bank of Ukraine of 26.05.2000 No. 215 and registered in the Ministry of Justice of Ukraine 03.07.2000 for No. 382/4603 (with changes).

6. Recognize invalid:

Procedure for provision of permission to accounting of the raised funds on the terms of subordinated debt to the capital of bank, the No. 518 approved by the resolution of Board of the National Bank of Ukraine of 25.10.99 and registered in the Ministry of Justice of Ukraine 15.11.99 for No. 786/4079 (with changes);

The instruction about procedure for regulation and the analysis of activities of commercial banks approved by the resolution of Board of the National Bank of Ukraine of 14.04.98 No. 141 and registered in the Ministry of Justice of Ukraine 15.05.98 for No. 323/2763 (with changes).

7. The resolution becomes effective in 10 days after its state registration in the Ministry of Justice of Ukraine, except Item 6, which becomes effective since 01.01.2002.

The instruction about procedure for regulation of activities of banks in Ukraine approved by this resolution becomes effective since 01.01.2002.

8. To general department of banking supervision (P.V.Andrushchenko) to bring this resolution after its state registration to permission of independent structural divisions of the National Bank of Ukraine, territorial administrations of the National Bank of Ukraine, and also banks for management and use in work.

9. To impose control of execution of this resolution on the vice-chairman V. L. Krotyuk, General department of banking supervision (P.V.Andrushchenko), Operation management (V. D. Shchutsky) and chiefs of territorial administrations of the National Bank of Ukraine.

 

Approved by the Resolution of Board of the National Bank of Ukraine of August 28, 2001 No. 368

The instruction about procedure for regulation of activities of banks in Ukraine

Section I. General provisions

This Instruction is entered for the purpose of ensuring stable activities of banks and timely accomplishment of obligations to investors by them, and also prevention of the wrong resource allocation and loss of the capital because of the risks inherent in banking activity.

The instruction is developed according to the commonly accepted principles and standards in the international practice.

According to the Law of Ukraine "About the National Bank of Ukraine" and the Law of Ukraine "About banks and banking activity" the National Bank of Ukraine (further - National Bank) determines procedure of payments of prudential standard rates, being all banks, obligatory for accomplishment:

standard rates of the capital:

minimum size of the regulatory capital (N 1),

sufficiency of the regulatory capital (NRK);

capital adequacy of 1 level (HK1);

sufficiency of fixed capital of 1 level (HOK1);

standard rates of liquidity:

coverage ratio liquidity on all currencies (LCRBB);

coverage ratio liquidity on foreign currencies (LCRIB);

coefficient of net stable financing (NSFR);

standard rates of credit risk:

the maximum extent of credit risk on one partner (N 7),

big credit risks (N 8),

the maximum extent of credit risk on transactions with the faces tied with bank (N 9),

standard rates of investment:

investment into securities separately on each organization (N of 11)-1,

total amount of investment (N 12).

For the purpose of increase in stability of banks in the period of financial and economic instability, creation of capital inventory by them for increase in capability to resist to risks the National Bank establishes requirements for forming of capital buffers by banks, namely: buffers of preservation, counter-cyclical buffer and buffer of systemic risk.

For systemically important banks the National Bank also establishes requirements for forming of the buffer of system importance.

The bank does not include in calculation of prudential standard rates, one of components of which is the regulatory capital or its components, assets or their parts included in deductions from the capital of bank according to Regulations on procedure for determination by banks of Ukraine for the size of the regulatory capital approved by the resolution of Board of the National Bank of Ukraine of December 28, 2023 No. 196 (with changes) (further - No. Provision 196).

The bank when calculating the cumulative size of the assets weighed on degree of credit risk according to Item 1.2 of Chapter 1 of the Section IV of this Instruction does not consider assets which contain in the trade book and are included by bank in calculation of the minimum extent of market risk according to requirements of the Regulations on procedure for determination by banks of Ukraine for the minimum extent of the market risk approved by the resolution of Board of the National Bank of Ukraine of December 30, 2021 No. 162 (with changes) (further - No. Provision 162).

The bank when calculating prudential standard rates uses the credit ratings of debtor/partner/asset on the international scale determined by rating agencies "Standard&poor" s ", " Moody "s Investors Service", "Fitch Ratings" taking into account Item 38 of the Section II of Provisions on determination by banks of Ukraine of the extent of the credit risk on active banking activities approved by the resolution of Board of the National Bank of Ukraine of June 30, 2016 No. 351 (with changes) (further - No. Provision 351).

Action of this Instruction extends to all banks of Ukraine irrespective of patterns of ownership.

To National Bank of unreliable information of rather prudential standard rates banks bear responsibility according to requirements of the current legislation of Ukraine for provision.

Section II. Requirements to the capital size

1. The bank according to the Provision No. 196 calculates the size:

1) regulatory capital;

2) capital of 1 level;

3) fixed capital of 1 level;

4) capital 2 levels.

2. The minimum size of the regulatory capital (The N 1) makes 200 million UAH.

3. The minimum size of the regulatory capital (The N 1) of the bank which lost the status of transitional bank on the bases determined by part of the seventeenth article 42 of the Law of Ukraine "About system of guaranteeing household deposits" shall conform to requirements of Item 2 of the Section II of this Instruction.

Section III. Requirements to capital adequacy of bank

1. The bank shall support the capital level sufficient for simultaneous observance on permanent basis:

1) the minimum values of the capital adequacy ratios established in Chapters 1, 2 Sections IV of this Instruction;

2) the increased values of the capital adequacy ratios established by results of assessment of bank which is carried out during banking supervision;

3) the size of the combined capital buffer according to Chapter 3 of the Section IV of this Instruction;

4) the level of sufficiency of domestic capital according to the Regulations on the organization of process of assessment of sufficiency of domestic capital in banks of Ukraine and banking groups approved by the resolution of Board of the National Bank of Ukraine of December 30, 2021 No. 161 (with changes).

2. The bank is forbidden to pay dividends, to share profit in any form if such payment or distribution lead to non-compliance with level of the capital necessary for ensuring fulfillment of requirements, established in Item 1 of the Section III of this Instruction.

3. Capital adequacy ratios [the standard rate of sufficiency of the regulatory capital (NRK), capital adequacy ratio of 1 level (HK1) and the standard rate of sufficiency of fixed capital of 1 level (HOK1)] are the most important indicators of activities of bank determining the actual level of providing covering of consequences of risks which the bank undertakes in the course of the activities.

Section IV. Capital adequacy ratios

Chapter 1. Standard rate of sufficiency of the regulatory capital (NRK)

1.1. The standard rate of sufficiency of the regulatory capital (NRK) is calculated as the relation of the size of the regulatory capital to cumulative exposition under risk.

1.2. The bank determines cumulative exposition under risk by the following formula:

SE = KR + SHOUTING * 10 + RR * 10 + Ri-NKR,

where XIE-cumulative impact of risk;

The KR-cumulative size of the assets weighed on degree of credit risk which is calculated as total book value of the assets and off-balance obligations weighed on degree of credit risk according to Items 1.3-1.6 of Chapter 1 of the Section IV of this Instruction after their reduction by the amount of the providing determined in Item 2.5 of Chapter 2, Item 5 of Chapter 4 of the Section VI of this Instruction taking into account requirements of Item 29 of Chapter 1, of Chapter 5 of the Section VI of this Instruction;

The SHOUTING-minimum extent of operational risk calculated according to Regulations on procedure for determination by banks of Ukraine for the minimum extent of the operational risk approved by the resolution of Board of the National Bank of Ukraine of December 24, 2019 No. 156 (with changes);

RR-minimalny the extent of market risk calculated according to the Provision No. 162;

Ri-sovokupny the size of the differences arising owing to moving of tools to the bank/trade book according to requirements of Item 257-4 of Chapter 39 of the Section V of the Regulations on the organization of risk management system in banks of Ukraine and banking groups approved by the resolution of Board of the National Bank of Ukraine of June 11, 2018 No. 64 (with changes) (dalee-Polozheniye No. 64), also reduce cumulative exposition under risk, calculated according to Item 1.6 of Chapter 1 of the Section IV of this Instruction;

NKR-nepokryty the credit risk, is calculated according to Items 31, 32 Chapters 7 of the Section II of Provisions No. 196.

1.3. The bank for calculation of capital adequacy ratios divides assets into groups on risk degree and sums up them taking into account the corresponding coefficients of weighing:

a) The I group of assets with risk degree of 0 percent:

cash;

bank metals;

assets on transactions with National Bank;

The paragraph the fifth is excluded according to the Resolution of Board of the National Bank of Ukraine of 18.12.2018 No. 139;

assets and financial liabilities on transactions with the central executive bodies of Ukraine in national currency (hryvnia);

assets on transactions with the international banks of development determined according to Item 2 of Article 117 of Regulations of the European Parliament and Council (EU) No. 575/2013 of June 26, 2013 about prudential requirements for credit institutes and investment firms and about modification of Regulations (EU) No. 648/2012 (further - international banks of development);

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