Guaranteeing the Deposits of Individuals during Martial Law

On March 18, in his address, Volodymyr Zelenskyi initiated the introduction of the procedure of guaranteeing of 100% of citizens’ deposits in all Ukrainian banks.

On April 1, 2022, the Verkhovna Rada approved the Draft Law No. 5542-1 “On Amendments to Certain Laws of Ukraine on Ensuring the Stability of the Deposit Guarantee System for Individuals” as amended.

Thus, the Law provides for:

– guaranteeing the deposits of individuals in full (without limitation on the amount of the deposit) for the duration of martial law in Ukraine and for 3 months after its termination;

– 3 months after the termination of martial law in Ukraine, the amount of the maximum amount of compensation for deposits is set at UAH 600,000 (so far the maximum amount of compensation has been set at UAH 200,000);

– joining of Oshchadbank to the Deposit Guarantee Fund;

– increasing the financial stability of the Deposit Guarantee Fund by restructuring its debt to the Ministry of Finance of Ukraine.

During this period, the Deposit Guarantee Fund reimburses each depositor of the bank in full, including interest accrued at the end of the day preceding the day of the withdrawal of the bank from the market, except as provided in part four of Article 26 of the Law of Ukraine “On Deposit Guarantee System for Individuals”.

Undoubtedly, this Law will help to increase depositors’ confidence in the banking system and ensure its stability in such a difficult time.

It should be noted that this Draft Law has been under consideration in the Verkhovna Rada since 2021, and the latest version, which was approved by the relevant committee before the war, stipulated for a gradual increase only in the guarantee from UAH 200,000 to UAH 400,000 and then to UAH 600,000.