Are borrowers at risk of bankruptcy and bank liquidation?
According to the NBU, in 2019, two banks went bankrupt in Ukraine. The rest – 509 of their branches closed. How does it threaten borrowers in 2020?
and how Online loan Can a microfinance organization help repay debt on time in a bankrupt bank? The answers are below.
How is the bank liquidated?
Let us consider in more detail how the bank is liquidated. This will help you understand how to react to the lender’s bankruptcy news.
Introduction of interim administration in bank
The introduction of an interim administration into a financial organization is implemented by the National Bank of Ukraine for the stated reasons of Art. 75 of Ukraine’s “On Banks and Banking” Law:
- Failure to meet the obligations of depositors and creditors;
- 5% or more reduction in daily regulatory funds and capital adequacy for the reporting month;
- Systematic violation of the laws of Ukraine;
- Systematic errors in reporting or publishing intentionally inaccurate information to hide real financial indicators;
- Lack of internal control system of the organization;
- Presence of more than 40% of risky assets (excluding rehabilitation).
The process of introducing interim administration is designed to help the bank become solvent and to “clean up” financial statements. In practice, it lasts for about 1 year. And if during this time the organization cannot restore the property and fulfill its obligations, its activity stops.
Bank liquidation process is done:
- By owner’s decision;
- If the National Bank of Ukraine withdraws its banking license for the reasons specified in Article 77 of the Law of Ukraine “On Banks and Banking Activities:
- False documents were submitted to obtain banking license;
- After obtaining the license, not a single banking operation was performed;
- Systematic violation of the laws of Ukraine.
Also, the Deposit Guarantee Fund for individuals can initiate the cancellation of the bank’s license.
After the NBU enters the information of legal entities and individual entrepreneurs in the Unified State Register on the bank’s liquidation, the financial organization stops the activity. However, this does not mean that borrowers can forget about their obligations.
What should the borrower do during the bank liquidation?
If the borrower has learned that the bank is in the process of liquidation, it should personally visit the nearest branch with passport and identification code.
Interim management is interested in restoring the solvency of the financial organization as soon as possible. Therefore, the bank may require the borrower to repay the loan prematurely by offering more favorable terms (for example, writing off the portion of interest). And for a borrower with a loan on loan – they can write off large amounts of fines and penalties if he repays the loan in a single payment.
In such a situation, if there is no money to pay, it is important to know where you can get it from. One of the options available to every adult citizen of Ukraine – online loans:
- Up to 20 000 UAH for any purpose;
- In 15 minutes, money on an operating bank’s card;
- Without coming to office;
- Passport and identification code only;
- Even with a bad credit history.
You can find out where to pay the loan from. On Website Deposit Guarantee Fund for individuals or for its hotline number 0-800-308-108, customers can obtain contact with a bankrupt bank or a new creditor and find out the details.
But is it worth looking at who to loan to if the original lender is liquidated?
Is it not possible to pay the loan if the bank goes bankrupt?
The borrower is required to repay the loan, even if the lender goes bankrupt. Restrictions on refusal of payment have to be met – from the calculation of a fine by the Executive Service for listing assets against loan repayments.
After the liquidation of the bank, each customer will be informed in writing. The letter includes payment information of the new lender or NBU savings account details for the repayment of loans:
- Through the cash desk of any bank;
- Using bank transfers through online banking;
- Through payment terminals.
New information is being liquidated on the bank’s website.
After the loan is repaid, the borrower obtains an official certificate of absence of the loan.
How to get a loan from a reliable bank?
To get a loan from a reliable bank, it is important to not only compare the interest rates of financial institutions, but also check their ratings.
- A list of solvent operating banks is available NBU website;
- List of banks is indicated in the liquidation FGVFL website.
Read: For each village – a bank: the pros and cons of creating a postal bank in Ukraine