For each village – a bank: the pros and cons of creating a postal bank in Ukraine


Ukrposhta may soon become a postal bank and has the opportunity to expand the range of financial services provided. However, not everyone in Ukraine supports this idea.


19 May Verkhovna Rada Adopted in first reading Bill no. 2788, which would allow Ukropsta to provide banking services. 232 deputies voted “for”.

According to the Bill, the country’s main postal operators will be able to open and maintain postal accounts, issue payment cards. Ukrainians will be able to open deposits in Ukrposht, pay utility bills and other services with a card, receive pensions, salaries and social assistance. Ukrposhta will not provide loans to individuals and legal entities at its own expense.

The main goal of the bill is said to be the ability to provide financial services to about 15 million people in rural areas, where there are no bank branches, but Ukroppsta exists. Thus, the level of financial inclusion in Ukraine may increase. However, everything is not so simple. The Postal Bank bill caused heated discussion and even led to clashes between the National Bank of Ukraine and Ukropsta. What is the difference between his ideas and suggestions – we will understand in the article.

World experience

Ukrposhta cites Kazakhstan as an example of the successful investment of national postal operators with banking functions. As can be seen from the table below, 70% of post offices in Kazakhstan are also located in rural areas, and financial services account for 42% of the post operator’s total income. Since 2003, Kazpost has been empowered to perform certain types of banking functions: to open deposits, maintain and issue payment cards to individuals and business entities.

Republic of Kazakhstan Ukraine
Area, km 2 2 724 902 603 628
The population 1911 100 41,992,670
Population density, people / km2 6.82 73.00
Number of post offices 3400 10 1039
– in rural areas 70% 61%
Number of Employees 22,700 72,000
Financial services share in postal operator’s total revenue 42% 38%

The following table shows that the financial inclusion index in the country is an order of magnitude higher than Ukraine. By the way, according to this indicator, our country is at the level of Uganda and Gabon.

Number of accounts (age 60+) Electronically paid or received (60+) Account Received PO / Government Pay (60+)
1–4. AustriaGermanyFinlandSwitzerland – 100% 1–4. New zealandAustriaUnited KingdomLuxembourg – 99.8% -98.9% 1–4. IsraelJapanNorwayNew zealand – 92.5% -80.1%
……….. ……….. ………..
53. Kazakhstan – 74.9% 44. Kazakhstan – 68.3% 28. Kazakhstan – 63.0%
88. Ecuador – 46.1% 59. Chile – 42.6% 46. RF – 53.6%
89. Ukraine – 45.9% 79. Ukraine – 42.0% 64. Ukraine – 36.9%
90. Uganda – 45.8% 80. Gabon – 38.8% 65. ServiceItai – 34.8%
91. Panama – 44.7% 81. Libya – 38.7% 66. Botswana – 34.4%

What scenarios are possible in ukraine

Looking at the opinions of different parties, three schemes can be distinguished, according to one of which Ukroppsta will work and provide many banking services.

1. The agency. According to this model, Mail is fully negotiating with the bank. This model is supported by the National Bank of Ukraine. In this case, Ukrposhta will provide through the services of its branches which will actually be provided by the bank. Read more in the article.

2. Match your own. Ukrposhta will be able to open its own postal current and deposit accounts – the scheme provided by bill number 2788. In fact, Ukropsta becomes the National Postal Bank.

3. Hypocrisy buys a bank. This option is currently very likely and, as reported by the editors of Pespace magazine, has already been discussed by Ukrposhta and National Bank.

NBU status: Agent model and payment accounts after adoption of law on payment services

In the comments Payspace magazine The National Bank of Ukraine noted: “Bill No. 2788-D has set the right goal – to overcome the challenges of financial inclusion and attract citizens to banking services. However, this is only a beautiful idea on paper Is, but in practice it is very risky. Besides, it is expensive for the state. “

The main arguments of the regulator against the creation of postal bank:

  1. Ukrposhta will not follow banking rules and regulations. The company will not be required to obtain a banking license to provide banking services. “The activity of such a quasi-bank would be uncontrollable,” notes NBU.
  2. Ukrposhta lack of money guarantee to depositors. In case of financial problems in Ukrposhta, they will become the problems of taxpayers. Despite the fact that Ukrposhta will become a member of the Deposit Guarantee Fund, it will not be able to withdraw from the market under banking law, as it is not a bank. Therefore, in the case of problems with the postal operator, or due to the profitability of the proposed business model, the option to capitalize only at the state’s expense is possible.
  3. Ukrposhta will provide banking services with the operation of other activities within the same balance sheet. In other words, it would be impossible to separate cash flow from financial services and other activities. This is an additional risk for enterprise customers.
  4. The government has announced its intention to reduce the role of the state in the financial sector. The Ukrakoshta will increase it. The regulator stated, “a reduction in the role of the state will contribute to competition to improve the quality of financial services and, accordingly,”. Today, the state’s share is 55%. The government planned to reduce it to 25% by 2025 due to partial privatization of state banks.

National Bank of Ukraine

What does National Bank provide?

As an alternative to creating a postal bank, the regulator offers Ukrposhte to operate according to the “agent” model. Ukrposhta will, in this case, provide through the services of its branches what will actually be provided by the bank – public or private, subsidiary or partner.

Ukroppsta will also be able to open and maintain payment accounts after the adoption of the bill on payment services, which will be registered in Parliament in the coming months. “In this way, those citizens who do not yet have accounts will be able to use financial services,” NBU notes.

Extreme state

Outrage in your comments Payspace magazine Responded to National Bank’s arguments.

  1. Contest. Ukrposhta does not plan to compete with banks, but rather wants to be the main competitor of mattresses and glass jars, with around 15 million Ukrainians now depositing money.
  2. According to Risk Bill No. 2788-D, Ukroppsta will not carry out high-risk lending activities to either individuals or business entities at its own expense. The bill specifically provides for the right to open and maintain postal current and deposit accounts under opening and monitoring and in the manner established by the NBU. And the funds raised for postal accounts will be kept in reliable banks of Ukraine. All funds of the population in such accounts shall be guaranteed by the Personal Deposit Guarantee Fund. That is, in fact, Ukrposhta will carry out “limited” banking activities under the control of the NBU.
  3. Government’s stake in banking sector According to Ukrposhta, the provision of banking services by postal operators does not increase the state’s share in banking sector. Eventually, a large amount of payments and transfers go through Ukrposhta every year, as well as pensions and social assistance. These amounts should already be reflected in the payments and payment figures through state legal entities.

Igor Smilanski
General Director of JSC “Ukrposhta”

What are the main benefits of creating a postal bank?

  • Increasing financial literacy of the population;
  • Affordable e-commerce for residents of remote settlements;
  • Lower tariffs for the population to pay utility bills;
  • Modern payment infrastructure for farmers, regional communities and 15 million inhabitants of remote villages;
  • Reduction of budget expenditure by 2 billion UAH per year, which the government now spends on the disbursement of pensions;
  • Decrease in state share in banking sector;
  • Attracting 25-30 billion dollars to the country’s economy through the inclusion of residents of villages and towns in the banking system;
  • To extend lending opportunities for rural residents.

And now consider Ukrposhta’s arguments in more detail.

1. Ukrosta has 10 860 branches, which is about 40% more than the coverage of all bank branches in the country. In the last four years, banks have closed one-third of their branches in Ukraine, and their numbers continue to decline. Today, the banking network covers only 6% of settlements, and there are no banking institutions in settlements with fewer than 2000 people. At the same time, the network of Ukrposhta branches covers 100% of settlements.

According to the National Postal Operator, the situation along with the existing infrastructure for servicing of payment cards also leaves a lot to be desired. In Ukraine, there are only 318.4 thousand units of payment terminals (less than 8 thousand per 1 million people). The number of ATMs is 19.7 thousand units (470 units per 1 million people), and 70% of the settlements do not have ATMs.

2. Today Ukrposhta already provides many financial services, such as currency exchange, cash issuance, payment of bills, money transfers, and one of the largest payment systems with a market share of 24%. At the same time, the company already meets most of the requirements of the NBU in the framework of Bill 2788-D, and after its adoption, Ukrposhta will also become a member of the Guaranteed Deposits of individual funds on equal terms for banks.

3. For the technical and financial capabilities of Ukrposhta, here are some figures the company has shared with the editors of PaySpace magazine. Over 10.6 million transfers and 110 million payments go through the Ukrposhta JSC annually, with millions of citizens being paid pensions and social assistance. Ukrposhta controls 45% of the total pension payments and 24% of the Ukrainian translation market.

In addition, over the years, the national postal operator has installed more than 5,000 payment terminals, computerized villages with a population of more than 2,000 people, and one for mobile offices for settlements with fewer than 2,000 people. Pilot project is initiated. Ukrposhta performs full automation of the company and has already announced a tender for the purchase of an ERP system.

Therefore, the company is confident of its ability to become a national postal bank, provides access to financial services to a large proportion of the population, and generally increases the level of financial exclusion in Ukraine.

Opinion of banks

We asked for comment on several large Ukrainian banks to find out their attitude to Bill No. 2788 and the creation of the National Postal Bank. However, no response has been received yet. If the situation changes, we will certainly supplement the article with the opinions of players in the banking market.

But right now, bank representatives can take an anonymous survey about the changes at Ukrosta’s bank that won’t take long.

Read: How quarantine affected IT in Ukraine: expert opinion and forecast


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