OREANDA-NEWS. The Administrative Board has approved a new structure of the Deposit Guarantee Fund (DGF). The decision to this effect was taken at the Board's meeting on 3 December 2015.

“The Fund's existing organizational structure was established in 2012. Back then, nobody planned to clean up the banking system. Since the beginning of 2014, 63 banks have been transferred to the DGF for resolution. With this in mind, the DGF currently needs restructuring to be able to effectively address the challenges, such as the search of investors for insolvent banks and asset management. The new structure, which has been developed with the assistance of the World Bank staff and the U.S. Treasury Department staff, is intended to make the DGF an efficient institution capable to cope with the current challenges,” said Chairman of the DGF Administrative Board and NBU First Deputy Governor Mr Oleksandr Pysaruk.

The changeover to the new organizational structure will be completed by Q2 2016.

The reshaping of the organizational structure is critical for ensuring the efficient performance and strengthening the institutional capacity of the Fund in response to present-day challenges. The preparatory work for restructuring began straight after the adoption of the revised Law “On the Deposit Guarantee System”. The main changes in the operational procedures of the DGF, which have been designed building on international best practices, will take effect from 1 January 2016,” said DGF Managing Director Mr. Kostyantyn Vorushylin.

In accordance with the Decision of the DGF Executive Board, a Department of Consolidated Sales will be established at the DGF. This department will be responsible for asset management and the sale of assets of insolvent banks, thus merging the functions performed by the DGF authorized officials into a single department. The new structure will enable the DGF to enhance the transparency and reduce asset management-related costs.

To ensure the consolidation of insolvent banks’ assets, a data storage the will be established at the DGF. It will be maintained and managed by a newly established Information Technology Department. Going forward, the data storage is planned to serve as a platform for the consolidation of financial and operational activities of insolvent banks.

The new organizational structure will see the establishment of a Financial Investigations Department that will carry out investigations into the activities of bank owners and bank-related parties whose actions or omissions have driven a bank into bankruptcy. Additionally, the department will be responsible for implementing the anti-corruption program at the DGF.

“The new structure will ensure the full transparency of all the processes related to the sale of assets of banks under the jurisdiction of the DGF and enhance the internal control, thus increasing the DGF’s efficiency. To achieve this goal, the core staff will be selected through open competition. We hope that the DGF will attract highly qualified professionals with irreproachable business reputation. We have already embarked on this process,” underline Mr Pysaruk.

The aforementioned reform measures will secure more revenues, enabling the DGF to fulfill its obligations to the state and insolvent banks’ creditors and to enhance the performance of the functions assigned by the Law of Ukraine “On the Deposit Guarantee System”.