No demand for new banks in Ukraine - NBU deputy governor

MOSCOW. Oct 18 (Interfax) - Ukraine currently sees no demand for setting up new banks, and the National Bank of Ukraine (NBU) has not received a single package of documents over the past five years, NBU Deputy Governor Dmitry Oleinik said.

"The number of applications from non-banking players is also low. However, demand this year is higher than in 2022," Oleinik said in an interview with Ukrainian media outlets.

The NBU has received over 20 applications this year, most of them from financial institutions and lessors plus some from insurance companies, compared to only six such applications in 2022, he said.

"Half of them have been declined, and the rest are still under consideration," he said.

Demand from payment market players for licenses to provide financial payment services has increased, with 70 non-banking institutions having sought such licenses, including 55 that have applied several times, he said.

"The new laws significantly change approaches, with lending unions to be able to operate based on a standard or simplified license depending on the scope of services, while financial institutions and pawnshops will have their licenses reissued, and insurance companies are facing relicensing. However, we aren't expecting the story of the payment market players to be replayed," Oleinik said.

There were no delay on the NBU's side when financial companies that had a license to transfer funds this spring have been relicensed, and what is more, the requirements for confirming financial status were even eased and legislative amendments were initiated to extend the deadlines, he said.

"However, some big players hoped for the National Bank's formal approach. When you can see all companies and their approaches, this becomes obvious. Companies that sought to stay on the market and properly prepared all the documents were ultimately able to get licenses," he said.

The NBU's tougher requirements are aimed primarily at eliminating the gray market where licenses are sold on the Internet and DarkNet, he said.

"Owing to the new requirements, along with capital requirements and disclosure of ownership structure, the market will finally become transparent," he said.

As reported, 63 banks are currently operating on the Ukrainian market. The NBU revoked the license from Ukrbudinvestbank in early October.

As of late September, there were 99 non-life insurance companies (-2 compared to August), 12 life insurance companies (no change), one insurance company with special status, 158 pawnshops (-3), 143 credit unions (-3), 82 leasing companies (no change), 594 financial companies (-12), 56 insurance brokers (-1), and 70 collection bureaus (+2) on the Ukrainian non-banking market.

There are also 24 banking groups (-1) and 20 non-banking financial groups (-1) officially recognized on the market.

There are 23 payment systems instituted by residents, including state-owned ones (-1), and 16 international payment systems instituted by non-residents (no change) in Ukraine.

In September, there were 19 payment institutions on the market (+1), 11 financial institutions having the right to provide payment services (no change), one bank licensed to issue e-money (no change), and one postal operator (no change).