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The respective provisions are set out in NBU Board Resolution No. 407, dated November 25, 2016, On Amendments to NBU Board Resolution No. 210, dated June 6, 2013, On Setting an Upper Limit on Cash Payments (hereinafter – Resolution No. 407), the NBU reported.

The aforementioned resolution sets an upper limit for settlement of payments in cash at UAH 50,000 per one business day between individuals and enterprises (sole proprietors) and between individuals under purchase-sale agreements that are subject to notarization.

Individuals are allowed to make cash payments exceeding UAH 50,000 by transferring funds from one current account to another one, depositing and/or transferring funds to current accounts, including notary's deposit account, or separate current account in domestic currency.

Read alsoNBU to lower ceiling of cash payments of individuals threefold starting Jan 4At the same time, no restrictions will apply to cashless settlements and banks are obliged to ensure the execution of cashless payments in full upon the request of clients.

Meanwhile, the upper limit on the settlement of payments in cash between enterprises (sole proprietors) remains unchanged at UAH 10,000 per day.

The NBU underlines that setting the upper threshold for settlement of payments in cash for individuals at UAH 50,000 will not cause any inconveniences for citizens and will only apply to large purchases (such as real estate, jewelry, vehicles, pieces of art, fur, expensive watches and tours.

The NBU's decision to lower the upper threshold for settlement of payments in cash is in line with international practices followed by most European countries (France, Belgium, Portugal, Italy, Spain and Greece that have already have established caps on cash payments, while other countries plan to impose similar restrictions on cash payments.

In accordance with the Tax Code of Ukraine, the State Fiscal Service of Ukraine shall monitor the compliance with the rules governing the settlement of payments in cash for goods (services).

Setting an upper limit on cash payments made by individuals at UAH 50,000 will ensure regular cash supplies to the banking system and accelerate its circulation and will narrow the use of cash and contribute to the development of the cashless segment.

It should be noted that the Comprehensive Program of Ukrainian Financial Sector Development Until 2020 aims to gradually reduce the M0-to-GDP ratio (the level of cash in the economy) to 12% by 2020 (in 2014, the M0-to-GDP ratio stood at 18.1%, having decreased to 14.6% in 2015).