OREANDA-NEWS. In October 2016, NBU completed the examination of related-party asset-side transactions of 14 banks.  In total, of 1 November 2016 the regulator verified such transactions in 58 banking institutions.

According to NBU diagnostics, 27 banks perform related-party transactions in compliance with regulator’s requirements, so they are not obliged to provide NBU with the action plan on on bringing the volumes of transactions with related parties in accordance with the regulatory requirements.

24 more banks are currently drafting three-years schedule for repayment of related-party loans, and 4 banking institutions have already agreed such schedules with the NBU.

Until 2016 year-end, NBU is to inspect all banking institutions.

“Last two years the NBU works on finding out real volumes of related-party loans.  According to findings of diagnostics, lots of Ukrainian banks actually using the households deposits financed business activities of their owners and other related parties with these funds.  Such activity posed a threat to stability of banks and the banking system in general. However, due to NBU efforts, there risks are significantly mitigated. Many banks prepared three-years schedules for repayment related-party loans, which will allow to suppose that in 2019 banking institutions will work without violating adequacy ratios”, states Mr Oleksii Rudyi, Head of Related Parties Monitoring Office.

Key focus while performing NBU diagnostics regarding asset-side transactions with related parties was on examination and assessment of disclosure of bank’s beneficial owners and counterparties , their attribution to related parties, nature of relations and transactions between them and the bank, as well as agreements signed with bank.

NBU examines how banks perform asset-side transactions in compliance with principle of their counterparty studying, adequacy of procedure for identification of beneficial owners and correspondence of data from state registry of information with actual business owners.