National Bank of Ukraine ( uk, Національний банк України) or NBU ( uk, НБУ) is the

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a centra ...

Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inva ...

– a government body responsible for unified state policy in the field of country's monetary circulation, including strengthening of the national currency unit, hryvnia. The National Bank of Ukraine employs over 12,000 people, making it one of the leading banks. It regulates and supervises activities, functions and legal status of government and commercial banks based on principles of the

Constitution of Ukraine The Constitution of Ukraine ( uk, Конституція України, translit=Konstytutsiia Ukrainy) is the fundamental law of Ukraine. The constitution was adopted and ratified at the 5th session of the ''Verkhovna Rada'', the parliament ...

and the law of Ukraine.

History

Banking in Ukraine The history of banking in Ukraine since Ukrainian independence in 1991 has seen since the late 2000s several periods of bank mergers and acquisitions of different natures.

traces its history back to 1918 when on 22 December 1917, the

Central Council of Ukraine The Central Council of Ukraine ( uk, Українська Центральна Рада, ) (also called the Tsentralna Rada or the Central Rada) was the All-Ukrainian council (soviet) that united deputies of soldiers, workers, and peasants deputie ...

adopted a law "On transformation of the

Kyiv Kyiv, also spelled Kiev, is the capital and most populous city of Ukraine. It is in north-central Ukraine along the Dnieper River. As of 1 January 2021, its population was 2,962,180, making Kyiv the seventh-most populous city in Europe. Ky ...

office of the Russian State Bank into the Ukrainian State Bank". The law united all offices of the former State bank, Noble Land Bank, and Peasant Land Bank. At the same time there existed a decree of the

Central Executive Committee of Ukraine All-Ukrainian Central Executive Committee ( uk, italic=yes, Всеукраїнський центральний виконавчий комітет) was a representative body of the All-Ukrainian Congress of Soviets. It was the supreme legislative ...

about the nationalization of banks since 14 December 1917. On 5 January 1918, the Ukrainian State Bank started to issue its own money. On 10 August 1918, there was signed a statute on the Ukrainian State Bank. On 23 August 1918, there was established the State Land Bank. At the end of

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

became occupied by a new Russian regime –

Bolsheviks The Bolsheviks (russian: Большевики́, from большинство́ ''bol'shinstvó'', 'majority'),; derived from ''bol'shinstvó'' (большинство́), "majority", literally meaning "one of the majority". also known in English ...

. Bolshevist Russia adopted a law of

War Communism War communism or military communism (russian: Военный коммунизм, ''Voyennyy kommunizm'') was the economic and political system that existed in Soviet Russia during the Russian Civil War from 1918 to 1921. According to Soviet histo ...

which discontinued use of any financial institutions. However, in 1921 across Ukraine started to be established State Banks of the Russian SFSR which later were transformed into the Central Bank of the USSR. In the 1980's, before the

fall of the Soviet Union The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the Sov ...

and during the times of

perestroika ''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...

, the National Bank of Ukraine was a republican branch of the Central Bank of the USSR, while there were registered number of banks with various status. There were over 15 banks of ministerial status, over 20 banks of state/cooperative institutions, Moscow banks in Ukraine, banks with state status. Officially, the National Bank of Ukraine acted as the Central Bank of Ukraine since early 1991. Like institutions of many newly independent nations, it faced dire financial straits during the 1990s, leading to a prolonged period of

hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...

. On 20 March 1991, the Verkhovna Rada (parliament) of Ukraine adopted the resolution "On Banks and Banking Activity", which became Law on May 1. The resolution declared ownership by the

Ukrainian SSR The Ukrainian Soviet Socialist Republic ( uk, Украї́нська Радя́нська Соціалісти́чна Респу́бліка, ; russian: Украи́нская Сове́тская Социалисти́ческая Респ ...

of the Ukrainian Republican Bank of the State Bank of the USSR (later National Bank of Ukraine), the Ukrainian Republican Bank of the State Commercial Industrial-Constructional Bank of the USSR "Ukrprombudbank", the Ukrainian Republican Bank of the Savings Bank of the USSR, and the Ukrainian Republican Bank of the ForeignEconomBank of the USSR as well as the Ukrainian Republican Department of Encashment of the State Bank of the USSR. In late February/early March 2022, following the declaration of martial law on 24 February 2022, the National Bank of Ukraine took the extraordinary step of creating and promoting two separate accounts to receive donations (domestic and international) in their response to the

Russian invasion of Ukraine On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has resulted in tens of thousands of deaths on both sides. It has caused Europe's largest refugee crisis since World War II. An ...

: one account is to support the Ukrainian military, and the other account is to support the general populace with humanitarian assistance. On 5 March 2022, the NBU reported having raised "more than UAH 10 billion" (roughly USD 350 million) for military and humanitarian aid.

Legal status and structure

The legal status of the National Bank of Ukraine and the principles of its organization and activities are determined by the

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 100 million and is the state-owned property which is in the full economic competence of the National Bank. According to Article 99 of the

, adopted in 1996, the main function of the country's central bank is to ensure stability of monetary unit – the Hryvnia (Ukrainian's national currency). 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 Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...

circulation,

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...

, strengthening of

monetary unit A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...

; it coordinates functioning of the banking system in general; determines

exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of t ...

of the monetary unit against foreign currencies. The National Bank determines a kind of

bank notes A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...

, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...

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 bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with ...

s' registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions. The National Bank of Ukraine has the power to initiate legislation.Rada Approves Cancellation Of Rule That Bans Deputies From Switching Factions
, The Financial (October 8, 2010) Resolutions of the NBU becoming valid just by publishing on their homepage www.bank.gov.ua. Decisions of the NBU may be just appealed at court due to Art.74 of the Law about the National Bank, however, courts may not suspend resolutions during the investigation of appeals, just by court sentences. The National Bank of Ukraine is governed by the Head of the National Bank of Ukraine and its directory, while its functions are coordinated by the Council of the National Bank of Ukraine. The council consists of 15 members including the Head of the National Bank as the ''

ex officio An ''ex officio'' member is a member of a body (notably a board, committee, council) who is part of it by virtue of holding another office. The term '' ex officio'' is Latin, meaning literally 'from the office', and the sense intended is 'by right ...

'' position. The other members of the council are appointed by an equal quota of seven members from the

President of Ukraine The president of Ukraine ( uk, Президент України, Prezydent Ukrainy) is the head of state of Ukraine. The president represents the nation in international relations, administers the foreign political activity of the state, condu ...

and the

Verkhovna Rada The Verkhovna Rada of Ukraine ( uk, Верхо́вна Ра́да Украї́ни, translit=, Verkhovna Rada Ukrainy, translation=Supreme Council of Ukraine, Ukrainian abbreviation ''ВРУ''), often simply Verkhovna Rada or just Rada, is the ...

(Ukraine's national parliament). A Council's meeting is valid if at least six members are present.

Functions

255px, 100 Ukrainian hryvnia bill According to the

, the main function of the National Bank of Ukraine (NBU) is to ensure the stability of Ukraine's monetary unit (the hryvnia). To carry this out, the National Bank fosters the stability of the banking system and, within its competence,

price stability Price stability is a goal of monetary and fiscal policy aiming to support sustainable rates of economic activity. Policy is set to maintain a very low rate of inflation or deflation. For example, the European Central Bank (ECB) describes price s ...

. Due to Art.51 of the law about the National Bank of Ukraine, the NBU is accountable for its activities to the

(the parliament of Ukraine), the

and the

Cabinet of Ministers of Ukraine The Cabinet of Ministers of Ukraine ( uk, Кабінет Міністрів України, translit=Kabinet Ministriv Ukrainy; shortened to CabMin), commonly referred to as the Government of Ukraine ( uk, Уряд України, ''Uriad Ukrai ...

. All registered banks in Ukraine are member of the Deposit Guarantee Funds, which guarantees deposits up to 200.000 UAH per person and bank in case of insolvency. The Oshadnybank is excluded from this fund because Ukraine guarantees their deposits directly. Banks are divided by the National Bank into four categories depending on their capitals (for intensity of banking supervision). There are a couple of big banks owned through off-shore companies. However, since 2016 all bank owner-structures had to be published till the last physical person to the National Bank of Ukraine to enforce the Anti-money-laundering and -tax-evasion-policy of the NBU.

Governors of the National Bank of Ukraine

The Governor of the National Bank of Ukraine is dismissed and appointed by the

(Ukraine's parliament). The

nominates a candidate before she/he can obtain a parliamentary approval. The President (also) submits to the Verkhovna Rada the draft resolution on the dismissal of the Governor. Since the bank's establishment, the following statesmen were the Governors of the National Bank of Ukraine (initially the title of the position was the Chairman of the Board of the National Bank of Ukraine)

Commemorative coins

The national Bank of Ukraine offers a broad scale of

commemorative A commemorative is an object made to memorialize something. Commemorative may refer to: * Commemorative coin, coins that issued to commemorate something * Commemorative medal, a medal to commemorate something * Commemorative plaque, a plate typic ...

and bullion coins and

numismatic Numismatics is the study or collection of currency, including coins, tokens, paper money, medals and related objects. Specialists, known as numismatists, are often characterized as students or collectors of coins, but the discipline also incl ...

products, which are being sold primarily (2/3 of production) by the branches of NBU and 1/3 by state banks ( Oshadnybank and Ukrgasbank).

References

Sources

Dushkevych, N. and V. Zelenyuk (2007) "Banking in Ukraine: Changes Looming?" Beyond Transition Newsletter 17:2, (The Newsletter About Reforming Economies, THE WORLD BANK, 2007).

Про банки і банківську діяльність
Law of Ukraine. March 20, 1991.
Про банки і банківську діяльність
Law of Ukraine. Accessed on August 17, 2006.
Про Національний банк України
Law of Ukraine. Accessed on August 17, 2006.

External links

*

* Melnyk, P., Tarahul, L., Hordei, O. '' ttp://pidruchniki.ws/10310208/bankivska_sprava/bankivski_sistemi_deyakih_postradyanskih_krayin Banking system of Russia'. Banking systems of foreign countries (handbook). 2010. * Kostyuchenko, O.
Creation and evolution of banking in Ukraine
'. Banking Law. 2011. {{DEFAULTSORT:National Bank Of Ukraine Banks established in 1991

Banks of Ukraine Independent agencies of the Ukrainian government Financial regulatory authorities of Ukraine 1991 establishments in the Soviet Union Government finances in Ukraine Ukrainian companies established in 1991 Institutions with the title of National in Ukraine