Four credit unions cease operations – National Bank

The National Bank of Ukraine (NBU) says the country's four credit unions cease their operations, shutting down on their own initiative.

"After reviewing the applications submitted by financial institutions, the National Bank revoked licenses for providing financial services (except for professional activities on the securities market) of the following credit unions: Budova Investment Union, Olvia, Lepta, and Inter-Invest," the regulator said on its website on October 5.

Fulfillment of obligations

The revocation of a license does not absolve a credit union of the obligation to meet the obligations before its members, who must also meet their obligations to the credit union. In particular, members of the credit union who have debt on loans must pay them off before the deadline and in the amount specified in the contract.

Read alsoBanking reform: NBU launches joint project with Poland, LithuaniaThe return of deposits is made by mutual agreement of the parties or no later than the term specified in the contract, but credit unions are not members of the Deposit Guarantee Fund. That is, the government does not guarantee a refund to depositors if a credit union goes bankrupt.

What's credit union

A credit union is a non-profit organization founded by individuals, trade unions, and their associations on a cooperative basis to meet the needs of its members in mutual lending and financial services through the members' combined monetary contributions.

Split

On September 12, 2019, the Verkhovna Rada, Ukraine's parliament passed a draft "split" law on the consolidation of state regulation of financial services markets, which provides for the liquidation of the National Commission on the Financial Services Market State Regulation and redistribution of its functions between the National Bank and the National Securities and Stock Market Commission.