LAW OF UKRAINE

of May 20, 1999 No. 679-XIV

About the National Bank of Ukraine

Section I General provisions

Article 1. Terms and concepts

In this Law terms and concepts are used in the following value:

bank metals - the gold, silver, platinum, metals of platinum group brought (affined) to the highest tests, in ingots and powders the having quality certificates, and also the coins made of precious metals;

bank regulation - one of functions of the National Bank of Ukraine which consists in creation of system of the regulations regulating activities of the banks determining the general principles of banking activity, procedure of banking supervision, responsibility for violation of the bank law;

banking supervision - the control system and the active ordered actions of the National Bank of Ukraine aimed at ensuring compliance by banks and other persons concerning whom the National Bank of Ukraine performs supervising activities of the legislation of Ukraine and the established standard rates, for the purpose of ensuring banking system stability and depositor protection and creditors of bank;

Determination of the term "currency values" is excluded according to the Law of Ukraine of 21.06.2018 No. 2473-VIII;

the public market - the market in which transactions on purchase and sale of securities between persons who are not primary creditors and borrowers and when means as a result of security sale in such market arrive for benefit of the security holder, but not their issuer are performed. It is used by Central Banks for purchase and sale, as a rule, of short-term government securities for the purpose of regulation of money supply. As a result of purchase investment of capital in economy increases, as a result of sale - decreases;

Foreign exchange position - ratio of requirements and obligations of bank in each foreign currency and in each bank metal. In case of their equality the line item is considered closed, in case of inequality - open. The open line item is short if the amount of obligations on foreign currencies and bank metals exceeds amount of requirements, and long if the amount of requirements for foreign currencies and bank metals exceeds amount of obligations;

monetary policy - complex of actions in the field of the currency circulation and the credit aimed at providing price stability by use of instruments of monetary policy;

monetary obligations - currency in the address, financial requirements to the National Bank of Ukraine, except for obligations of the National Bank of Ukraine to the Cabinet of Ministers of Ukraine and international financial institutions

cash substitute - any documents in the form of bank notes, different from monetary unit of Ukraine, released not by the National Bank of Ukraine and made for the purpose of implementation of payments in economic circulation, except currency values;

The term "exchange monetarist policies" is excluded according to the Law of Ukraine of 19.10.2021 No. 1811-IX;

The term "discount monetarist policies" is excluded according to the Law of Ukraine of 19.10.2021 No. 1811-IX;

gold and foreign exchange reserve - the reserves of Ukraine displayed in balance of the National Bank of Ukraine which include the assets recognized as the world community as international and intended for international settlements;

control of carrying out monetary policy - annual estimation of coordination of realization of monetary policy by the National Bank of Ukraine with achievement in the medium term of the inflation purposes determined by the Basic principles of monetary policy taking into account the flowing and predicted economic and financial development of Ukraine and the world for the purpose of accomplishment of the main function by the National Bank of Ukraine;

the last resort lender - the National Bank of Ukraine which the bank for receipt of refinancing in case of exhaustion of other opportunities of refinancing can address;

Treasury obligations - debt securities which are emitted by the state on behalf of its authorized bodies are placed exclusively on a voluntary basis among physical persons and legal entities, certify entering by their owners of money into the budget and grant the right to financial income or other property rights, in accordance with the terms of their release;

metal accounts - accounts which are opened by authorized banks of Ukraine for accounting of the transactions performed with bank metals;

international standards of audit - the documents accepted by the International federation of accountants determining audit standards;

The term "international standards of professional practice of internal audit" is excluded according to the Law of Ukraine of 19.10.2021 No. 1811-IX;

international accounting standards - the documents accepted by Council for international accounting standards determining accounting standards and financial accounting;

unrealized income / expenses - income/expenses from revaluation of financial assets and obligations, monetary gold and bank metals, and also income/expenses from purchase of foreign currency, monetary gold and bank metals if such transactions are performed not on the official exchange rate;

discount rate of the National Bank of Ukraine - one of monetary tools by means of which the National Bank of Ukraine establishes for banks and other subjects of the monetary market reference point concerning the cost of the raised and placed money;

the official publication of the National Bank of Ukraine - the printing edition of National Bank registered in accordance with the established procedure;

the official exchange rate - the currency rate officially established by the National Bank of Ukraine as authorized body of the state;

protection of values and objects - the organization and practical implementation by National Bank of measures of protection of rather certain and belonging to it buildings, constructions, the territories, vehicles, currency values, securities and other personal and real estate directed to non-admission or the termination of illegal actions concerning them, ensuring their immunity and integrity, the termination of unauthorized access to them of the third parties and also on ensuring personal security, life and health of employees of National Bank;

paying balance - set of the economic operations performed between residents and nonresidents for certain period of time. In paying balance transactions with goods, services, primary and secondary income, the transactions connected with financial requirements and obligations for other countries of the world are reflected;

the realized income/expenses - income/expenses from revaluation during disposal of overpriced financial assets and obligations, monetary gold and bank metals

reserve line item in the International Monetary Fund (further - the IMF) the requirements of state member to the IMF determined as difference between quota and assets of the IMF in its (state member) currency minus the cash holdings of the IMF received by state member in type of loan of the IMF and account balances of the IMF N 2, not exceeding one tenth percent from state member quota;

refunding rates of the National Bank of Ukraine - the payment for the loans granted to banks expressed as a percentage which is established by the National Bank of Ukraine for the purpose of influence on currency circulation and crediting;

special drawing rights - internationally acknowledged reserve asset created by the IMF on amendment of the existing internationally acknowledged reserve assets;

accounting systems - set of the relations concerning forming, processing, storage and information transfer between state bodies, financial institutions, other legal entities during implementation of the state projects;

financial stability - condition of financial system in which it is capable to provide properly opportunity effectively to perform the key functions, such as financial intermediation and ensuring implementation of payments, and thus to promote sustained economic growth, and also to resist to negative impact of the crisis phenomena on economy;

price stability - preserving purchasing power of national currency by maintenance in the medium term (from 3 to 5 years) of low, stable inflation rates which are measured by consumer price index;

The terms "associated person", "banking group", "essential participation" are used in this Law in the values given in the Law of Ukraine "About banks and banking activity";

The terms "currency values", "authorized institutions" are used in this Law in the values given in the Law of Ukraine "About currency and currency transactions";

Terms "settlement of overdue debt", "the register of the collection companies" and "the collection company" are used in this Law in the values given in the Law of Ukraine "About consumer crediting";

The terms "activities authorization", "payment service provider", "non-financial payment service", "limited payment services", "oversight of payment infrastructure", "operator of payment system", "technological operator of payment services", "payment instrument", "payment market", "payment service", "Register of Payment Infrastructure", "participants of the payment market" and "digital money of National Bank" are used in this Law in the values given in the Law of Ukraine "About payment services".

Article 2. Legal basis of activities of the National Bank of Ukraine

The National Bank of Ukraine (further - National Bank) is Central Bank of Ukraine, special central state body, legal position, tasks, functions which powers and the principles of the organization are determined by the Constitution of Ukraine, this Law and other laws of Ukraine.

The location of Council of the National Bank of Ukraine (further - Council of National Bank), Boards of the National Bank of Ukraine (further - Board of National Bank) and central office of National Bank - the city of Kiev.

Article 3. Authorized capital

The National Bank has the authorized capital which is state-owned property.

The size of the authorized capital constitutes 10 million hryvnias. The size of the authorized capital can be increased according to the decision of Council of National Bank.

Sources of forming of the authorized capital of National Bank are part of its profit to distribution, and if necessary - the Government budget of Ukraine.

Article 4. Economic independence

The National Bank is economically independent body which performs expenses at the expense of own income, and in the cases determined by this Law - also at the expense of means of the Government budget of Ukraine.

The National Bank is legal entity, has the isolated property which is object of the right of state-owned property and is assigned to it on the right of economic maintaining.

The National Bank does not answer for obligations public authorities, and public authorities do not answer for obligations National Bank, except cases when they voluntarily assume such obligations.

The National Bank does not answer for obligations financial institutions, and financial institutions do not answer for obligations National Bank, except cases when they voluntarily assume such obligations.

The National Bank for ensuring the activities and accomplishment of the functions determined by this Law has the right to create the companies, organizations, separate divisions (branches and representations in Ukraine, and also representative offices of National Bank abroad).

National Bank, its companies, organizations, separate divisions (branches and representations in Ukraine, and also representative offices of National Bank abroad) have seal with the image of the State Emblem of Ukraine and the name.

Article 5. Estimate of administrative expenses

The National Bank annually constitutes the estimate of administrative expenses.

The National Bank of Ukraine includes in the estimate of administrative expenses expenses and investments on ensuring activities of National Bank, investment into creation and development of material and technical resources of National Bank, and also renumeration expenses to members of council of National Bank for execution of the functions by them with disaggregation of the size, positions and frequency of payments of remuneration.

The National Bank displays the income and expenses, determines profit (losses) and constitutes the financial reporting according to international accounting standards.

The National Bank creates general reserves which are used on covering of its losses, and also revaluation reserve which is used on covering of unrealized expenses.

In case of insufficiency of means of general reserves of excess of expenses of National Bank over its income it is compensated at the expense of means of the Government budget of Ukraine of the following for reporting to year.

Article 5-1. Profit to distribution

Profit earning is not the purpose of activities of National Bank.

The National Bank determines profit to distribution by reduction of profit by the amount of unrealized incomes. The National Bank sends unrealized incomes to revaluation reserve.

Unrealized incomes which become implemented in the next periods join in profit to distribution in the corresponding accounting periods.

The National Bank compensates the amount of excess of unrealized expenses over the amount of reserve of revaluation by means of profit of the current year, and in case of their insufficiency - means of general reserves.

The National Bank after confirmation by external audit and approvals of the annual financial reporting by Council of National Bank by profit before distribution provides forming of general reserves in the amount of 10 percent from annual average amount of monetary obligations of National Bank which is determined according to the procedure, established by National Bank.

Council of National Bank has the right to make the decision on the direction of profit to distribution to increase in the authorized capital of National Bank.

After the direction arrived to distribution to the purposes determined by parts five and the sixth this Article, the profit to distribution is subject to transfer in the Government budget of Ukraine in full.

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