Business in Ukraine

Raiffeisen Bank Aval, an Open Joint Stock Company (”Bank Aval”), was registered as the “Joint Stock Commercial Bank Aval” on March 27, 1992 (operated under the brand name of Joint Stock Postal Pension Bank Aval until September 25, 2006). Since October 2005, the Bank has been part of the Raiffeisen International Bank Holding AG Group (as of January 1, 2008 the Group held 95.96% of shares in the Bank).

Raiffeisen Bank Aval continues to retain a leadership position among Ukrainian banks, as measured by total assets. As of the beginning of 2008, the Bank served a total of 4.1 million individual clients, 196 thousand SME clients and over 9 thousand corporate clients.

The Bank provides a broad range of standard and innovative banking services through its nationwide network which comprised, as of January 1, 2008, a total of 1,180 outlets located in big cities, provincial and community centres and villages throughout Ukraine.

The Bank has an effective management structure, based on a clear division into business lines (corporate, retail, SME and treasury) and supporting verticals (information technologies, operation support, accounts, controlling, security and other) both in the Bank’s Head-office and regional directorates. As a truly international bank, Raiffeisen Bank Aval clearly separates front-office functions from back-office ones to achieve higher quality of client service and enhance risk mitigation.

Through all these years, clients, partners, and banking experts have frequently recognized the high quality of Raiffeisen Bank Aval’s performance. In particular, during the international festival contest The Choice of the Year the Bank was awarded prizes in the nominations Mortgage Programme 2007 and Deposit Programme 2007.

In 2007, the Bank also won the MasterCard Bank of the Year contest in Ukraine. Raiffeisen Bank Aval was recognized among the best in the nominations Mortgage of the Year and Banking Product of the Year. The all-Ukrainian rating programme Brand Guard 2007 named the Bank’s brand as the highest-valued among Ukraine banks.

The reputable UK-based magazine The Banker named Raiffeisen Bank Aval Ukraine’s best bank as part of its Awards for Excellence rating. At the same time, the European Bank for Reconstruction and Development has for the fourth consecutive year recognized Raiffeisen Bank Aval as Ukraine’s most active bank participating in the EBRD’s Trade Facilitation Programme (TPF).

To crown it all, Raiffeisen Bank Aval was recognized in 2007 as an employer that cares about its personnel and is committed to promoting their professional growth and social security. The Bank was named Ukraine’s best banking employer according to a survey commissioned by the Correspondent magazine and conducted by the Gfk Ukraine company. The Personnel Training magazine named the Bank as the Best Corporate Training Environment.

The Bank’s regional directorates have also been recognized among the best in their respective geographical areas.

Tags: Banking System by Vitaliy Tretyakov
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General Information

PrivatBank has many times been announced as “The Best Bank in Ukraine”
The Commercial bank PrivatBank was founded in 1992. Currently PrivatBank is one of the most dynamically developing Ukrainian banks and occupies leading positions in the national bank rating. As of October 1st, 2005, PrivatBank’s total net assets equaled UAH20,014 million. The statute fund of the bank comprised UAH1,130 million, and property assets were UAH1,918 million. The credit portfolio of the bank made UAH14. 948 billion, including credits to individuals totaling UAH5.5 billion. The financial result of PrivatBank for three quarters of 2005 totaled UAH345.685 million

At the end of 2005 Global Finance magazine, for the second year in a row, acknowledged PrivatBank as the Best bank in Ukraine. Global Finance also also acknowledged PrivatBank as the best bank in Ukraine in the annual nomination of The Best Emerging Market Bank 2005. Financial and analytic magazine The Banker, based on results of research conducted in 2000 and in 2002, gave the The Bank of the Year rank to PrivatBank. Another influential magazine, Euromoney, for four years in a row - in 1999, 2000, 2001, 2002, as well as 2005 - acknowledged PrivatBank as the best bank of Ukraine.

PrivatBank also is a leader among the Ukrainian commercial banks for number of clients: its services are used by more than 16% population of Ukraine population.

PrivatBank is a modern universal bank
Possessing a general license from  the National Bank of Ukraine for conducting bank transactions, PrivatBank carries a complete spectrum of bank services available in the domestic market for corporate and individual clients, in full accordance with international standards. The long-term interests of our clients are the main priorities of the bank. Our highly skilled team of specialists and personal managers carry the responsibility of providing high-quality services, which are timely and exactly meet all of our customers’ demands. Inculcating the new types of banking and constantly perfecting the complex of bank services, PrivatBank currently serves 306 thousand corporate clients and small businesses, and over 9.4 million individual accounts. As of October 1st, 2005 the amount of deposits from legal entities to PrivatBank comprised UAH6,583 million, including legal-entity deposit portfolio of UAH2,843. The amount of deposits from individual clients comprised UAH8.528 billion, the highest total among Ukrainian banks, including the individual-client deposit portfolio as UAH6,423 billion.

PrivatBank is the socially oriented bank
Successive policy of strengthening the bank’s stability and perfection servicing, PrivatBank considers it one of its priorities to develop the complex of hi-tech services to individual clients. At the moment, the bank offers more than 150 types of the most modern services, among which are account servicing, deposit operations, plastic card products, numerous programs on the consumer crediting, partnership projects with leading Ukrainian and foreign companies (media, real-estate, mobile, autoproducers, etc). PrivatBank was empowered by the government of Ukraine to proceed payments of pensions and social assistance to citizens, as well as indemnification payments to the victims of Nazi pursuits. Today the pension and social payments via PrivatBank are made to over 1 million people.

The national service network
The national network of PrivatBank servicing, including 1,902 branches and offices all over Ukraine, allows any client to receive the highest level of banking services virtually anywhere in Ukraine. The wide range of PrivatBank’s foreign partners not only demonstrates its position as a competent participant of the world banking system but also, and most importantly, allows it to completely satisfy the necessities of the bank’s clients in their international activites. PrivatBank has tight relations with the largest foreign banks, co-operating with them in different segments of the financial market. PrivatBank is empowered to service credit lines of the World bank of reconstruction and development (MBRR), European bank of reconstruction and development (EBRR) and German-Ukrainian Fund (GUF) of assistance to small and middle businesses.

PrivatBank is the leader in presenting innovative bank services
PrivatBank is the acknowledged payment cards leader in Ukraine. The bank has issued more than 8.9 million plastic cards (36% of the total number of cards issued by Ukrainian banks). PrivatBank’s network of servicing plastic cards comprises 2,703 ATM’s, and PrivatBank’s cards are accepted by more than 16.6 thousand retail institutions all over Ukraine. The nation wide network of card product services allows PrivatBank to actively inculcate “salary card programs” of payments to employees of the bank’s corporate clients.
PrivatBank is also the leader in the market of services to individual clients. So, more than 40% of Ukrainian banks’ clients accept credit on domestic purchases via the credit programs of PrivatBank. 27.8% of total clients choose Privatbank’s deposit programs, and more than 26% of clients perform the currency exchange operations in the bank. Almost 21% of the clients of all Ukrainian banks’ choose PrivatBank while opening accounts and more than 15% utilize PrivatBank’s services for money transfers.

PrivatBank is a team of highly skilled specialists
Reliability and quality of bank transactions depends in a great deal on the experience and competence of its specialists. Today the personnel of PrivatBank have a team of highly skilled specialists which is able to solve the most intricate problems in a timely manner, and satisfy the growing necessities of bank services clients. Right now, more than 23 thousand employees work at PrivatBank, including 2,400 specialists at its head office. The average age of the employees of the bank is 34 years. Most employees of PrivatBank (75%) have higher education, to meet the requirements of their positions. PrivatBank makes it very easy for its employees to upgrade their education (including high school and secondary education), more than 50% employees are annually promoted.

Bank Requisites

The closed joint-stock company the commercial bank “PrivatBank”

Address:  Naberezhna Pobedy Street, 50, Dnipropetrovsk, 49094, Ukraine

K/S 32009100400 in UNBU in the Dnipropetrovsk region
MFO 305299
EGRPOU 14360570
YNN 143605704021, certificate No40374554

PrivatBank was registered at National Bank of Ukraine’s ”Book Of Banks’ Registering” under No 92 on March 19, 1992, the Bank license No 22 dated December 4, 2001.

Enquiry Telephones:

• 8 800 500 00 30 around the clock, free of charge throughout Ukraine
• (380) 562 390 000 for international calls
• 390 000 in Dnipropetrovsk

E-mails:

•  privatbank@pbank.com.ua
•  hotline@pbank.com.ua

SWIFT: PBANUA2X
SPRINT: PRIVAT/UKRPACK

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Regulation On cashless settlements in domestic currency in Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 22 of 21.01.2004 and registered with the Ministry of Justice of Ukraine under # 377/8976 of 29.03.2004 (with amendments).

General rules, forms and standards of settlements for legal entities and natural persons and banks in monetary unit of Ukraine in the territory of Ukraine, accomplished with participation of banks shall be set by new version of the Regulation on the national currency cashless settlements in Ukraine (below - Regulation), which is approved by the Resolution of the Board of the National Bank of Ukraine # 22 of 21.01.2004 and registered with the Ministry of Justice of Ukraine under # 377/8976 of 29.03.2004.

Regulation On approval of changes to the Regulation on cashless settlements in domestic currency in Ukraine (approved on December 4, 2006 by Resolution # 236 of the Board of the National Bank of Ukraine of 18.10.2006, registered with the Ministry of Justice of Ukraine under # 1218/13092 of 20.11.2006 (published in the official Herald of Ukraine, 2006 # 47 of 04.12.2006, Article 3137).

Regulation On procedure of exercising by banks transactions with bills of credit in the national currency in the territory of Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 508 of 16.12.2002 and registered with the Ministry of Justice of Ukraine under # 174/7495 of 29.02.2003).

On December 16, 2002 the Board of the National Bank of Ukraine adopted Resolution # 508, which approved the Regulation on procedure of exercising by banks transactions with bills of credit in the national currency in the territory of Ukraine (below - Regulation). The above-mentioned Resolution of the National Bank of Ukraine is registered with the Ministry of Justice of Ukraine under # 174/7495.

According to this Resolution, there became invalid the Regulation on banks transactions with bills of credit, approved by the Resolution of the Board of the National Bank of Ukraine under # 258 of 28.05.1999.

The necessity to develop and approve a new Regulation was caused by passing of the Law of Ukraine “On the bill circulation in Ukraine under # 2374-111 of April 5, 2001.

The Regulation shall set new rules and procedure of effecting by banks bill transactions, which are drawn and are due to be paid in national currency within Ukraine.

Regulation on drawing up applications on purchase or sale of foreign exchange or banking metals by customers payment orders in foreign exchange or banking metals and providing them to authorized banks and other financial institutions and the procedure of their execution (approved by the Resolution of the Board of the National Bank of Ukraine # 82 of 05.03.2003 and registered with the Ministry of Justice of Ukraine under # 224/7545 of 20.03.2003).

This Regulation regulates, in particular, procedure of drawing up by customers payment orders in foreign exchange or banking metals and determines terms for effecting foreign exchange transfers and namely, a customer can chose such terms for foreign exchange transactions as “urgent”, “time” or “general”.

This Regulation also specifies procedure of drawing up by customers payment orders in foreign exchange, when making transfers within an authorized bank.

Furthermore, the Regulation makes provision for requirements on procedure of returning unexecuted foreign exchange payment orders by authorized banks servicing customers.

Regulation on procedure of effecting transactions with foreign exchange cheques in the territory of Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 520 of 29.12.2000 and registered with the Ministry of Justice of Ukraine under # 152/5343 of 21.02.2001).

This Regulation sets uniform rules and procedure on foreign exchange cheque transactions effected by authorized banks and financial institutions

According to this regulation, a cheque as a pay document shall comprise a written order of drawer of a cheque to holder of a cheque on paying out within a certain term of foreign exchange amount indicated in it.

World experience testifies to the fact that cheques payable to somebody are mostly widespread among all kind of cheques. They are well protected both in case of reimbursement and of loss. In accordance with the terms of this regulation, all cheques payable to somebody shall comprise the following essential elements:

• name of a document - “cheque” shall be written in a language in which it is drawn (or without a name, when a cheque is drawn in such countries as Great Britain, USA, Canada, Australia, Germany, etc.);

• an order to pay out e certain amount to holder of a cheque;

• name and requisite elements of an issuer and an payer;

• holder of a cheque’s company name for a legal person or family name for a natural person for whom a payment is effected;

• indication of currency type and amount of a cheque.

• cheque drawing date and cheque number;

• place of cheque issue;

• signature of a cheque drawer

For lack of the above-mentioned essential elements, a cheque is considered invalid, shall be returned to holder of a cheque and is not collected by a bank. Period of cheque validity is indicated on a cheque. For lack of such indication, period of cheque validity shall make up 6 months since the day of its issue.

Bank in Ukraine shall accept registered cheques in foreign exchange from holder of a cheque only for collection. Cheques in foreign exchange of the 1st group of foreign exchange Classificator of the National Bank of Ukraine (below - 1 group of Classificator) and 2d group of foreign exchange Classificator of the National Bank of Ukraine shall be accepted by a bank for collection only from their holders after providing documents, which identify their person or against their notary power of attorney.

Bank shall accept cheques for collection from natural persons both residents and nonresidents against application on accepting for collection cheques in foreign exchange. Cheques delivered to a bank by another person can be accepted for collection only in the following cases:

• in case of providing by holder of a cheque a duly authorized power of attorney;

• in case of a death of holder of a cheque, cheques from his heirs shall be accepted only for collection against documents, requested in accordance with the current legislation of Ukraine;

• a cheque, drawn in favour of a teenager before 15 years old or an incapable person can be delivered to a bank only by their legal representatives (parents, trustees);

• after reaching 15 years of age, a teenager can do it personally, but against written consent of his parents or other legal representatives, authorized in accordance with the current legislation of Ukraine (birth certificate, adoption certificate, trustee certificate, etc.)

Bank can accept cheques for collection on the security in accordance with the current legislation of Ukraine in the following cases:

• there is a need to guarantee execution of holder of a cheque his liabilities as to paying out commission to payers, when a bank which accepts a cheque for collection has some doubts as to paying it out;

• cheques have some damages (torn out and put together, original colour is changed, partially burn out, have some ink, paint or oil spots, but all these damages do not interfere with cheque identification);

• cheque period of validity is expired;

• bank which accepts a cheque for collection has no correspondent relations with issuing bank.

After receiving funds against cheque from a payer, a bank in accordance with preliminary agreement with a drawer of a cheque shall inform him per phone or with a letter on accepting cheques for collection, on receiving funds and on the name and location of a bank which is to pay funds.

Natural persons (residents and nonresidents), having foreign exchange current account in the bank, can receive funds against cheques in their account, the number of which shall be indicated in application form on accepting a foreign exchange cheque for collection.

Natural persons (residents and nonresidents), who have no foreign exchange current account in the bank, can receive funds against cheques in cash.

On request of a natural person (resident or nonresident), foreign exchange amount against cheque can be sold to the bank by foreign exchange purchase rate on the day of transaction; at this a natural person - nonresident, is provided with the form 377 together with cash foreign exchange warrants.

Funds against cheques intended for legal persons (residents) are prior transferred to foreign exchange clearing account, opened by bank for a legal entity in accordance with the Transaction Rules on foreign exchange interbank market of Ukraine, approved by the Resolution # 127 of 18.03.99 of the Board of the National Bank of Ukraine and registered with the Ministry of Justice of Ukraine on 18.03.99 under the # 171/3464.

Funds against cheques intended for representations of legal persons-nonresidents are transferred in accordance with normative and legal acts of the National Bank of Ukraine The Regulation sets requested essential elements for travelers cheques as well. A travelers cheque is a pay foreign exchange document used in non-trade international settlements which is drawer of a cheque’s money liabilities to pay out an amounts indicated in a cheque to a holder of a cheque, whose signature shall be put in a duly site by sale. Travelers cheque is to have the following requisite elements:

• name of a document - “travelers cheque”;

• name of issuing companies: American Express, Visa, Thomas Cook, City Corp., Bank of America, Swiss Bakers Travelers Cheques, etc;

• name of payer and his requisite elements;

• signatures of issuing companies’ authorized persons;

• foreign currency face value and its name;

• its series and number;

• place for signature of a person, intending to buy a cheque;

• place for signature of holder of a cheque by paying a cheque off.

The validity period of travelers cheques is not limited.

Date and place for cheque’s filling up are indicated in information message on travelers cheques sale. Travelers cheques are issued of a certain denomination.

Travelers cheques are drawn for a single holder, seldom - for two holders (signature of a holder (two holders) is put in a certain place at the sale day. Travelers cheques drawn for two holders can be used by both. Any of two signatures is valid when receiving cash funds against a cheque.

Banks which have according to the current legislation of Ukraine a special permission of the National bank of Ukraine for importing travelers cheques forms to Ukraine, shall have the right to conclude agreements with other resident banks for their further sell in Ukraine.

Transactions on travelers cheques’ purchase (pay off) and sale (change of foreign exchange in cash against foreign exchange cheques, below - sale) is executed by a bank against foreign exchange of the 1st group of Classificator or against Hryvnias.

Recovery to holder of a cheque for the lost travelers cheques is effected by the bank against agreements concluded with travelers cheques’ issuer.

Regulation on procedure of effecting bank transactions on guarantee in national currency and foreign exchange (approved by the Resolution of the Board of the National Bank of Ukraine # 639 of 15.12.2004 and registered with the Ministry of Justice of Ukraine under # 41/10321 of 13.01.2005).

This Regulation sets general rules of the National Bank of Ukraine on procedure for effecting bank transactions on granting and receiving banking guarantee in national currency and foreign exchange.

Regulation on discharge of transactions, arrest and forced writing off funds in foreign exchange and banking metals (approved by the Resolution of the Board of the National Bank of Ukraine # 515 of 03.12.2003 and registered with the Ministry of Justice of Ukraine under # 167/8766 of 06.02.2004).

This Regulation shall specify general rules of the National Bank of Ukraine and the procedure of execution by authorized banks and other financial institutions of discharge of transactions, arrest and forced writing funds in foreign exchange and banking metals off customers’ accounts and corresponding accounts of authorized banks residents, opened in other authorized banks residents.

Regulation on procedure of effecting transactions on documentary credits in settlements on foreign-economic transactions, which are carried out by authorized banks (approved by the Resolution of the Board of the National Bank of Ukraine # 514 of 03.12.2003 and registered with the Ministry of Justice of Ukraine under # 1213/8534 of 24.12.2003).

This Regulation shall specify general rules on opening, notifying, conducting and closing of documentary credits, which are effected by authorized banks for their customers, when settling accounts on foreign-economic contracts in foreign exchange and national currency.

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Legal Status of the National Bank of Ukraine

Legal status, principles of organization and activities of the National Bank of Ukraine are determined by the Constitution of Ukraine and the Law of Ukraine “On the National Bank of Ukraine”.

The National Bank of Ukraine is a legal entity with separated property, which is the object of the state property. Its authorized capital amounts to UAH 10 million and is the state-owned property which is in the full economic competence of the National Bank.

According to Article 99 of the Constitution of Ukraine, adopted in 1996, the main function of the country’s central bank is to ensure stability of monetary unit-the Hryvnia. To carry out its main function, the National Bank shall foster the stability of the banking system and, within its competence, the price stability.

According to the Law of Ukraine “On the National Bank of Ukraine”, the National Bank is the central bank of Ukraine, a specific central body of the state administration, its issuing center which pursue common state policy in money circulation, credit, strengthening of monetary unit; it coordinates functioning of the banking system in general; determines exchange rate of the monetary unit against foreign currencies. The National Bank determines a kind of bank notes, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals. The National Bank of Ukraine sets up the order of determining a discount rate and other interest rates; it gives permission for commercial banks’ registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions.

Functions of the National Bank of Ukraine

Main Function

According to the Constitution of Ukraine, the main function of the National Bank is to ensure the stability of Ukraine’s monetary unit.

To carry out its major function, the National Bank shall foster the stability of the banking system and within its competence, the price stability.

Other Functions

The National Bank shall carry out the following functions:

1. to determine and pursue the monetary policy in accordance with the General Principles of the Monetary Policy developed by the Council of the National Bank of Ukraine;

2. to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;

3. to act as the last-instance creditor for banks and to organize the refinancing system;

4. to establish the rules of conducting banking transactions, accounting and reporting, protection of the information, funds and property for the banks and other financial and credit institutions;

5. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;

6. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;

7. to determine the areas of the development of modern electronic banking technologies, to establish, co-ordinate and control the creation of electronic means of payment, payment system, banking automation and the banking information protection facilities;

8. to exercise the banking regulation and supervision;

9. to keep a Register of banks, their branch and representative offices, currency exchanges and financial and credit institutions, to license banking business and transactions, if provided for by the laws;.

10. to compile, analyze and forecast the balance of payments;

11. to represent Ukraine’s interests in central banks of other states, international banks and other crediting institutions, where the cooperation takes place at the level of central banks;

12. to exercise the currency regulation with the competence to be defined by a special law, to determine the procedure of effecting payments in the foreign currency, to organise and exercise the currency control over the commercial banks and other credit institutions which are in possession of a National Bank’s license for the transactions with currency values;

13. to ensure the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals;

14. to analyze the status of the monetary, crediting, financial, pricing and currency relations;

15. to organize the collection and transportation of bank notes, coins and other values;

16. to implement the national policy of the protection of state secrets within the system of the National Bank;

17. to take part in the training of personnel for Ukraine s banking system;

18. to exercise other functions in the monetary and crediting sphere within its competence defined by the law.

Tags: Finance by Vitaliy Tretyakov
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The evolution of the national banking system in Ukraine started in March, 1991, after the adoption of the Law of Ukraine “On Banks and Banking” by the Ukrainian Verhovna Rada. The Ukrainian banking system is a two-tier structure consisting of the National Bank of Ukraine and commercial banks of various types and forms of ownership including the state-owned Export-Import Bank and a specialized commercial Savings Bank.

The National Bank of Ukraine serves as the country’s central bank which pursues a uniform state monetary policy to ensure the national currency stability.

Commercial banks are formed as joint-stock companies or as companies on an equal footing with both legal and natural persons involved. The range of commercial banks activities includes: receiving deposits of enterprizes, institutions and households, crediting of economic entities and households, investments in securities, formation of cash balance and reserves, as well as other assets, cash and settlement servicing of the economy, foreign exchange operations and other services to natural persons and legal bodies.

The banks act in accordance with the Constitution of Ukraine, the Laws of Ukraine “On the National Bank of Ukraine“, “On Banks and Banking“, the Ukrainian legislation on joint-stock companies and other economic entities, as well as with the normative regulations of the National Bank of Ukraine and their Statutes.

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