Russia’s Central Bank has terminated the operation of branch offices of four Ukrainian banks – PrivatBank, All-Ukrainian Stock Bank, Kyivan Rus Bank, and ImexBank – on the territory of Crimea and Sevastopol. A press release issued by the Central Bank cites the banks’ failure to meet their obligations before account holders as the reason behind this action. Previously, the Russian Central Bank has threatened the Crimea-based Ukrainian banks with conservatorship over failure to meet their obligations.
“Termination of operations of branch offices … means the ban on carrying out banking and other transactions by these banks on the territory of Crimea and the city of Sevastopol, with the exception of transactions related to transfer of assets and obligations”, explains the press service. In addition, the Central Bank’s decision serves as the basis for the Fund for Protection of Depositors [an autonomous nonprofit organization created in Crimea in early April 2014] to purchase deposit claims and make compensation payments to customers.
“The decision to terminate operations by branches of Ukrainian banks is guided solely by the goals of protecting the interests of their depositors and customers, whose rights under law were violated due to, among others, a de facto cessation of activities by these branches”, notes the announcement. The Central Bank also points out to the “lack of prospects for renewal of operations” by these banks. Thus, it emphasizes that “there was no other way, except terminating operations of these banks, to ensure effective protection of the rights of their depositors and customers residing and carrying out economic activity in the mentioned territories”, and added that “civil law claims against these banks (including by the Fund for Protection of Depositors) will be reviewed, as necessary, by the competent judicial bodies in accordance with general procedures.”
In the meantime, journalists have been reporting huge lines outside of those branch offices of Ukrainian banks that are still operating. Notes a Crimean businessman Vladimir Kuntsov: “Ukrainian banks are really gone. As for the Russian banks, they have not come into Crimea yet. Clearly, all large Russian banks are wary of the sanctions.”
Translated by Olga Ruda