The Law of Ukraine on the system of guaranteeing deposits of individuals is the main tool for protecting depositors.

Provisions you need to know about the system of guaranteeing deposits of individuals in Ukraine.

The state took care of everyone who wants to increase their wealth through bank deposits by creating the Law of Ukraine “On a system of guaranteeing deposits of individuals”. This is a very interesting position, which helps an ordinary citizen to understand what will happen to his contribution in the event of a bank bankruptcy, how and in what amounts the repayment of deposits will take place. Such regulation at the legislative level prevents fraud in the banking sector and makes the investor a full player in the financial market.

This law of Ukraine can be considered mandatory for familiarization with each client of banks, but many of them do not even have the slightest idea what this issue is about. The main body and lever for streamlining the market for deposits of individuals is the Deposit Guarantee Fund for individuals. This body plays the main role of a regulator of relations between participating banks and individual depositors. The Executive Directorate of the Fund manages the activities of this association and makes decisions on the liquidation of the bank, regardless of the reason for bankruptcy. The law states that there is a guaranteed amount of compensation for each investor, today - 200 000 UAH (Article 26, Law of Ukraine “On the system of guaranteeing deposits of individuals”). Participation in the Fund is mandatory for all banks operating in Ukraine.

deposit guarantee law

History of changes to the Law on the system of guaranteeing deposits of individuals.

In recent years, this legislative act is constantly changing and supplemented, the state is constantly trying to protect the deposits of individuals. In 2018, the following changes were made to this law:

  • changes have been made to simplify the conduct of business and attracting investments through the issuance of securities, No. 2210-VIII dated November 16, 2017, VVR, 2018, No. 6-7, Article 38;
  • changes have been made that allow to improve the processes of credit risk management of banks and make deposits more secure, No. 2277-VIII of 02/06/2018, VVR, 2018, No. 11, Article 58;
  • changes have been made to improve the functioning of the financial sector in Ukraine, No. 2491-VIII dated 07/05/2018, VVR, 2018, No. 46, Article 369.

The law on guaranteeing deposits was created in order to make the financial market of Ukraine civilized and safe. The Verkhovna Rada has partially achieved its goal, but there are still many changes and improvements that should restore public confidence in the banking system and the institution of deposits.