OREANDA-NEWS. Given a difficult economic and political situation in Ukraine that is taking its toll on the entire banking industry and individual banks, on 11 September, 2014, the National Bank of Ukraine Board adopted a decision to grant two systemically important banks about UAH 2 billion in emergency loans. The banks that have received these loans belong to Group 1 banks by the size of assets.

This decision adopted by NBU Board in compliance with NBU regulations aims to stabilize the situation

in the banking system. At the same time, it has been prompted by the need to increase banks' liquid funds. Ukrainian banks experience a shortage of liquid funds due to premature withdrawals of household deposits and severe constraints in access to domestic and external market funding.

Commenting on such a step by the regulator, Director of the General Department of Banking Supervision Alla Shulga said: "The banks will use funds granted by the regulator to meet their obligations to clients, primarily depositors, on time. However, in order to minimize risks and improve liquidity conditions in these banks, certain restrictions have been imposed on banks' activities".

She also noted that loans had been granted against high-grade collateral of bonds issued by the State Mortgage Institution with additional security in the form of the State guarantee of issuer's liabilities issued by the Cabinet of Ministers of Ukraine and real estate evaluated by an independent real estate appraisal firm LLC Colliers International.

Alla Shulga emphasized that overseers had been appointed to all the banks that had received emergency loans and loans to preserve liquidity. This has been done to tighten control over banks' activities.

According to her, the regulator remains committed to pursuing a parity-based policy with respect to all banks, ensuring transparency and equal conditions of access to refinancing.

According to the laws of Ukraine, the National Bank of Ukraine is the lender of last resort to which banks that experience a temporary liquidity shortage may apply for refinancing when they cannot borrow from anywhere else.