On June 23, 2015, the PUBLIC JOINT STOCK COMPANY “Commercial bank “FINANCIAL INITIATIVE” (hereinafter - FINANCIAL INITIATIVE PJSCCB) was declared insolvent by decision of the Board of the National Bank of Ukraine.
The National Bank underlines that the majority of the bank's depositors, whose deposits are subject to reimbursement by the Deposit Guarantee Fund, or, to be more precise, 59 thousand persons, or 92% of all the depositors will be reimbursed in full. The Deposit Guarantee Fund will pay out the guaranteed amount to depositors in the amount of over UAH 3.7 billion.
FINANCIAL INITIATIVE PJSCCB was obliged within a 180-day time frame running from February 2015 until June 23, 2015, to bring its activities into conformity with the applicable Ukrainian laws, including the NBU regulations.
However, all the stabilization efforts, in particular, an injection of additional capital into the bank by the owner of a qualifying holding in this financial institution failed to prevent an outflow of funds, stabilize its liquidity and recover the solvency of this bank in the current financial crisis. This was evidenced by FINANCIAL INITIATIVE PJSCCB’s failure to meet its obligations to the National Bank of Ukraine under refinancing loans due to a severe shortage of liquidity experienced by the bank, a further outflow of funds from the bank, and numerous complaints from this bank’s customers received by the National Bank of Ukraine about the bank's failure to repay deposits to them.
The decision to declare FINANCIAL INITIATIVE PJSCCB insolvent was taken in compliance with Articles 7, 15, 55 of the Law of Ukraine On the National Bank of Ukraine, and Articles 67, 73, 75, 76 of the Law of Ukraine On Banks and Banking.
According to the applicable Ukrainian laws, FINANCIAL INITIATIVE PJSCCB that has been declared insolvent shall be placed under jurisdiction of the Deposit Guarantee Fund (hereinafter – the Fund), which shall appoint the provisional administration and authorized officials to this financial institution. The Fund guarantees the reimbursement of deposits to all depositors who will receive compensation for the amount of their deposit, including the interest accrued thereon on the date when the National Bank of Ukraine adopts a decision to declare the bank insolvent and the Fund initiates a winding-up procedure against this bank, but up to the compensation limit established on the date of the respective decision, regardless of the number of deposits held in one bank.