The National Bank has updated the requirements for the capital structure of banks in accordance with the norms of the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine to Improve the Organization of Corporate Governance in Banks and Other Issues of the Functioning of the Banking System” (No. 1587-IX dated June 30, 2021 of the year). These standards determine the introduction of a new (three-tier) capital structure for banks from August 5, 2024, the regulator’s press service reports.
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The regulation on the procedure for determining the amount of regulatory capital by Ukrainian banks is determined by:
- the procedure for calculating fixed capital of level I, additional capital of level I, capital of level II, their components and deductions from them; requirements for capital components through which capital is formed; procedure and conditions for the bank to obtain permission/approval from the National Bank regarding the inclusion of individual components in capital, etc.
Gradual introduction of new requirements
Gradual introduction of new requirements is expected:
< ul>before April 1, 2024, banks must develop internal regulations to determine the amount of regulatory capital; from April 1 to July 1, 2024 – conduct test calculations and report their results to the NBU; from August 5, 2024 – begin calculating regulatory capital in accordance with the new requirements.
The NBU noted that the introduction of a new capital structure is another significant step towards bringing the National Bank’s regulations in the field of regulation of banking activities closer to the standards of the European Union.
“Introduction of a new capital structure for banks is a significant step towards increasing the stability of the banking system and its competitiveness. Taking into account the results of the stability assessment, the current state of banks and the gradual introduction of new requirements, we are confident that banks will cope with this task,” noted First Deputy Chairman of the NBU Ekaterina Rozhkova.
Regulation on the procedure for determining the amount of regulatory capital by Ukrainian banks approved by Resolution of the Board of the National Bank dated December 28, 2023 No. 196, which comes into force on December 30, 2023.