Ukraine: new banking resolution offers more transparency for customers

In its effort to introduce advanced EU standards to protect consumers of financial services, on 28 November 2019 the National Bank of Ukraine (NBU) approved Resolution No. 141, which orders banks to publish information on their websites about services they render.

Being part of the NBU's long-term policy to develop more transparent and consumer-oriented rules on the financial services market, the Resolution sets out the requirements for public offers made by banks and makes it mandatory for banks to provide a client with calculator for expenses and revenue.

These newly introduced measures were created to make it easier for consumers to access all relevant information about the financial services (i.e. total price, terms and conditions, risks) of a given bank, which will allow them to compare opportunities offered by different banks with greater ease.

The NBU’s measures impose additional responsibilities on banks, which must comply even though these terms may result in extra expenses. As reported earlier, financial authorities can fine banks from EUR 185 to EUR 370 per violation for failing to provide consumers with full information about services before entering into a contract.

General information on a bank’s website

• The Resolution requires banks to publish the following information on their websites:
• list of services provided;
• terms and conditions of these services;
• cost, price (bank fees, interest rates);
• terms for receiving a promotional offer, including the validity period;
• client rights to withdraw from a banking service agreement, if provided by law;
• link to the bank’s webpage where the terms of the agreement (or offer) have been published;
• calculator of expenses and revenue;
• the bank's code of conduct; and
• information about terms for early termination of a banking services agreement.

Requirements for public offers

• Each bank's public offers must also be published on their websites, and must include the following information about the bank:
• full name;
• identification code and address;
• contact details and website address;
• details on licences and permits;
• link to the bank’s webpage, which must provide information on the material characteristics of its services and the terms to render them and information on the individual deposit-guarantee system;
• link to the NBU’s webpage where the Resolution has been published; and
• a notice explaining that in signing a public offer, a client must give specific consent to the terms and conditions of the services provided and a notice specifying that the client has the right to refuse the receipt of advertising materials through telecommunication channels (e.g. email, text message, etc.).

Calculator of expenses and revenue

Banks will be required to publish calculators on their websites that compare the total expenses or revenue of the services provided, including auxiliary services, taxes and customs. This calculator will make it easier for consumers to select banks with the most competitive offers.

Although the Resolution enters into force on 2 March 2020, provisions related to the calculator of expenses and revenue will become effective on 2 June 2020.

For more information on Ukraine’s financial services industry and how this new law could affect your business, contact your regular CMS source or the following local CMS experts: Ihor Olekhov or Artem Barabash.

Legislation: Resolution of the Board of the National Bank of Ukraine “On Approval of the Regulations on Informational Support of Clients in relation to Banking and Other Services” No. 141 dated 28 November 2019.

Authors:

Ihor Olekhov, Partner, ihor.olekhov@cms-cmno.com

Artem Barabash, Lawyer, artem.barabash@cms-rrh.com