The entire management team of the National Bank of Ukraine’s licensing department resigned on June 30, saying the bank’s leadership has become impossible to work with.
Decision-making, once collegial, has become overly centralized, Oleksandr Bevz, former director of the department wrote on Facebook on June 30.
According to him, the NBU no longer meets its own standards for transparency, independence and department autonomy. This threatens reforms in the banking and non-banking sectors, Bevz said.
“We refuse to back down from the principles because we understand the consequences for the country,” Bevz wrote on Facebook.
The NBU responded with a statement that its priority is “to maintain a collegial approach to decision-making.”
As the licensing department plays one of the most important roles in the NBU – registering and issuing licenses for banks and financial institutions, as well as approving their heads – the consequences may be severe.
According to Eugene Dubogryz, a former financial stability deputy at NBU and expert at nonprofit CASE Ukraine, the resignation may lead to licensing delays. The department’s new management may also make legal errors, such as when canceling licences for non-banking financial companies.
The team’s resignation might have stemmed from the bank’s attempts to put pressure on the departments. Dubogryz said that NBU’s top leaders intend to change the management at several departments, including the licensing department.
“Rumors of such intentions have been spreading in the NBU for quite a while, for several months,” Dubogryz told the Kyiv Post.
Last week, NBU governors already restructured the department of on-site bank inspections, having renamed it to the inspection department, and now they plan to hire a new director for it, Dubogryz says.
“Similar actions were expected in relation to the management of the licensing department,” Dubogryz told the Kyiv Post.
Bevz’s complaints aren’t new. Some former employees of the bank had previously complained that the NBU’s collegiality was being wiped out by an autocratic leadership style. After the former NBU’s governor Yakiv Smolii resigned in June 2020 due to “systemic political pressure,” many of other staff employees resigned, as well. Most of them said that they did it voluntarily, but have experienced interference in their work from the bank’s new leadership, the advisory NBU Council and outside officials.
