NBU refutes allegations of involvement in money pumping via Austrian banks

The National Bank of Ukraine has denied accusations of involvement in the withdrawal refinancing funds through Austrian banks specializing in similar services for clients from CIS states, as reported on the NBU website.

The report says correspondent accounts in these Austrian banks were used to artificially inflate the banks` capital and withdraw funds abroad.

According to the regulator, in mid-2014 the balances in correspondent accounts in such transit banks of 17 Ukrainian banks amounted to about $2 billion, and it was precisely the NBU leadership who then revealed the problem and set a deadline for the Ukrainian banks until April 1, 2016, to deal with it.

The report notes that head of the NBU Valeria Gontareva in autumn 2014 met with the head of the Austrian central bank to tell which banks in Austria were engaged in such schemes.

As a result, more than half of the balances in foreign correspondent accounts of Ukrainian banks were repaid in 2015, and at the moment none of the operating Ukrainian banks have correspondent accounts with such transit banks.

At the same time, of the 17 banks that used the services of transit banks, 11 were recognized by the NBU as insolvent.

The Individual Deposit Guarantee Fund in active cooperation with law enforcement bodies is engaged in the return of funds of insolvent banks placed abroad.

It is also reported that in order to avoid such situations in the future, the National Bank obliged banks that have funds left in the account of a foreign bank without an investment rating to form 100% reserves for these funds, which made it unprofitable for banks to withdraw funds abroad under this scheme.

In addition, the regulator monitors weekly the balances of Ukrainian banks in foreign correspondent accounts, and also actively cooperates with central banks of European countries to improve the system of data exchange on such transactions.

Last year, the National Anti-Corruption Bureau initiated criminal proceedings on the submissions of Center for Combatting Corruption into the siphoning from Ukraine via Austrian banks of at least UAH 12 billion in NBU refinancing funds from the number of Ukrainian banks in 2014-2015.

According to the official data of judicial rulings registry, the NABU is probing the siphoning of funds by NBU officials who conspired with the officials of KB Pivdenkombank, Bank Kyivska Rus, AvtoKrazBank, Terra Bank, City Commerce Bank, Delta Bank, Kreshchatyk, Finance and Credit with the participation of Meinl Bank Aktiengeselschaft (Wien, Austria). NABU detectives have also revealed that Tavrika Bank, FinrostBank, and Integral-Bank used the services of Meinl Bank.

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