On January 22, 2015, by virtue of the Laws of Ukraine On the National Bank of Ukraine and On Banks and Banking, the Board of the National Bank of Ukraine adopted a decision on declaring UKOOPSPILKA JSB insolvent.
The owners of UKOOPSPILKA JSB missed the chance to recover the bank, restore its financial health and viability and provide financial support to the Bank to keep it afloat. They failed to take any timely effective measures to prevent UKOOPSPILKA JSB from going insolvent.
Thus, starting from May 2014, the National Bank of Ukraine started receiving complaints filed by the bank's customers claiming that the bank had failed to meet its obligations to them. In addition, the off-site banking supervision has revealed a deterioration in UKOOPSPILKA JSB's liquidity ratios.
The bank failed to record past-due payment instruments on the respective off-balance accounts, thus violating NBU regulations.
In order to protect the interests of depositors and other creditors, in July 2014, the National Bank of Ukraine took a decision to place UKOOPSPILKA JSB under a special supervision regime through the appointment of an overseer who is an official of the NBU.
In the second half of 2014, the financial standing of UKOOPSPILKA JSB deteriorated further, with the bank's ongoing engagement in risky activities. In view of the above, in December 2014, the National Bank of Ukraine declared UKOOPSPILKA JSB a problem bank and placed it under a special supervision regime.
Under banking laws, a term was set for UKOOPSPILKA JSB to bring its activities in line with the applicable laws. UKOOPSPILKA JSB developed the resolution plan which did not contain sufficient and timely measures to improve the bank's financial standing and adjust its activities to the requirements of the laws of Ukraine.
Therefore, given the lack of prospects for a bank recovery and the need to protect the interests of depositors and other creditors of UKOOPSPILKA JSB, by virtue of Articles 7, 15, and 55 of the Law of Ukraine On the National Bank of Ukraine, and Articles 67, 73, 75, and 76 of the Law of Ukraine On Banks and Banking, the Board of the National Bank of Ukraine issued Resolution declaring UKOOPSPILKA JSB insolvent.
Please note that under applicable Ukrainian laws, the bank that has been declared insolvent shall be put in the hands of the Deposit Guarantee Fund (hereinafter – the Fund), which shall appoint the provisional administration and authorized persons to this financial institution. The Fund guarantees the reimbursement of deposits held in banks up to the amount of deposits, including accrued interest on the date of adopting the decision by the National Bank of Ukraine to declare the bank insolvent and the initiation of a winding-up procedure by the Fund, but not more than the maximum deposit insurance amount established on the date of issuing this resolution, regardless of the number of deposits held at one bank.