Ukraine’s parliament, the Verkhova Rada has passed on Nov. 15 the law proposed by the president Petro Poroshenko on returning personal savings deposits via the system for guaranteeing the deposits of individuals suffering losses because of banking or other financial fraud (No. 5390). Some 285 lawmakers supported the measure.
As reported earlier, on Nov. 11, during a meeting with depositors from Mykhailivsky bank Poroshenko said that he would submit draft law to parliament urgently.
According to the bill, banks performing the functions of a representative, agent or intermediary when attracting investments must acquaint customers in written form on the ineligibility of guarantee provided for such funds by the Individual Deposit Guarantee Fund (IDGF).
An explanatory note attached to the draft law said such a system would avoid violating the trust of depositors using banks. In particular, this pertains to the scheme under which individuals in banks are offered to sign a loan agreement with non-banking financial institutions via a bank representative. Bank accounts had been opened and funds were transferred to these non-banking entities.
According to the IDGF, Mykhailovsky bank used such a scheme with 14,000 individual depositors for more than Hr 1.5 billion worth of transactions.
More than 45 percent of the depositors were more than 55 years old.
Under the law, IDGF is tasked with studying carefully documents submitted by each individual depositor, and, not later than 20 working days from the date the law takes effect, to begin making payments to return savings deposits.
