The National Bank of Ukraine has fined Insurance Broker Grand Insur LLC (Odesa) UAH 51 thousand for violating the requirements in the field of financial monitoring.
According to the regulator’s website, the fine was imposed for violation of the requirements of clause 5, p. II of Regulation #140 and clauses 12, 13 of the Annex to Regulation #140 in terms of failure to submit reports to the National Bank on prevention and counteraction.
Starting from October 3, banks that have been able to buy and sell foreign currency at the request of their clients only within the official exchange rate of the National Bank of Ukraine +/- 1% may set it independently without this restriction.
The relevant provision is enshrined in the NBU Board Resolution No. 121 of October 2 on the transition to a regime of managed exchange rate flexibility, which amended the “military” NBU Board Resolution No. 18 of February 24, 2022.
“You read our amendments to Resolution No. 18 correctly: that is, there is no peg plus +1% now,” NBU Deputy Governor Yuriy Heletiy confirmed at a briefing on Monday.
The National Bank of Ukraine has allowed banks and non-bank financial institutions to sell additional cash currency in the amount of their balances as of April 13, 2022, starting from September 16, which it believes will help level the difference between the cash and non-cash exchange rates.
“This helps to increase the stability of the foreign exchange market and stabilize exchange rate expectations,” the NBU said in a post on its website on Friday evening, without specifying how much additional supply it was talking about.
The NBU reminded that currently banks and non-bank financial institutions can sell cash currency in the amount of its purchase exceeding the volume of its sales for the period from April 13, 2022, plus 120% of the volume of non-cash currency purchases from individuals from April 13, 2022.
It is noted that the NBU also allowed enterprises with a 100% state share to transfer funds abroad in order to fulfill obligations to a non-resident under a loan or credit that has been restructured on terms agreed by the government. In addition, other payments related to the servicing of such restructured obligations are allowed.
“Such changes will contribute to the proper completion of the restructuring of external debt by state-owned institutions,” the regulator said.
Another easing, according to the release, was the expansion of the list of medical services for which the population can make cross-border transfers.
“Rehabilitation services, as well as services for the purchase of prostheses and their components, installation, maintenance and repair of prostheses, have been added to the relevant list. This is important for restoring the health of people with disabilities, including combatants in need of prosthetics,” the NBU said.
The above-mentioned mitigations were introduced by the Resolution of the Board of the National Bank No. 115 dated September 15, 2023, the release said.
The National Bank of Kazakhstan has raised its economic growth forecast for 2024-2025 to 4-5% per year from the previously expected 3.5-4.5%, the regulator said in a statement citing its updated macroeconomic forecasts.
This year, GDP growth is still expected to reach 4.2-5.2%.
“Forecasts for the growth of Kazakhstan’s economy in the medium term have been improved. The expansion of business activity will be driven by sustained domestic demand, increased budget expenditures and the recovery of the oil sector. (…) The risks to the GDP forecast are associated with possible problems of access to international markets for Kazakh exports, as well as the likelihood of not achieving the planned oil production,” the statement said.
In addition, the inflation forecast has been adjusted. In the short term, uncertainty about price growth has decreased. In the baseline scenario, inflation is projected to be in the range of 10-12% this year (previous forecast – 11-14%), 7.5-9.5% in 2024 (9-11%), and 5.5-7.5% in 2025 (corresponding to the previous forecast).
“At the same time, without taking into account the direct effect of the increase in utility tariffs, to which the NBU does not respond by changing the key policy rate, the medium-term inflation target of 5% is expected to be reached by the end of 2025. This will be facilitated by the further easing of pressure from the external environment and monetary conditions that are in the restraining zone,” the statement said.
The main risks to the inflation forecast, according to the National Bank, include increased fiscal stimulus, “unanchored inflation expectations,” accelerating inflation in Russia and a possible rise in world food prices due to the failure to renew the grain initiative. Another risk in the forecast is the continuation of pricing reforms in the Kazakh fuel and lubricants market.
Kazakhstan’s economy grew by 3.1% in 2022, with inflation at 20.3%.
For more information on macroeconomics, please see the analytical programs of the Expert Club at https://youtu.be/zCJ1cU3n0sY?si=zfnGIkt5zdhX_j3x
Finod LLC, which was engaged in currency exchange and recently lost all its licenses by the decision of the National Bank (NBU), was the largest financial company in Ukraine in terms of revenue – UAH 2 billion 115 million at the end of the first half of 2023.
According to data on the NBU website, in the first quarter the leader was payment system Novapay with UAH 1 billion 666 million in revenue, but its data is missing in the table for the half-year, while the table for the first quarter did not include Finod’s data.
The next three companies, as well as in the first quarter, were formed by microcredit providers Ukr Credit Finance LLC (CreditKasa TM), 1 Safe Agency for Necessary Loans LLC (MyCredit TM) and Investrum (ZeCredit, BananaCredit TM), whose revenue amounted from UAH 1.16 billion to UAH 0.86 billion.
At the same time, “Ukr Credit Finance” increased its revenue in the second quarter compared to the first quarter by almost 1.5 times, strengthening its position, while “1 Safe Credit Agency” by 28%, and FC “Investrum” – by 5%.
“Investrum” of the market leaders has the lowest labor costs – only UAH 10.8 mln, as well as close to zero profit.
Six more companies operating in the microcredit market, as well as the network of payment terminals of FC “Kontraktovy Dom” (TM “Easypay”) follow with rather close indicators of revenue – from UAH 651.6 mln to UAH 516.0 mln.
In particular, we are talking about LLC “Maniveo Fast Financial Assistance” (Moneyveo), which reported the highest salary expenses among competitors, FC “E Groshi Kom”, “Aventus Ukraine” (TM CreditPlus), , LLC “Miloan” – UAH 617.47 million and “Lineura Ukraine” (TM “Credit7”) and “Consumer Center” (TM “ShvidkoGroshi”).
The largest in terms of assets and profit in the first half of the year was state-owned PJSC Ukrfinzhytlo, capitalized at the end of last year at the expense of government bonds – UAH 55.5bn and UAH 3.3bn, respectively.
The National Bank of Ukraine (NBU) has approved the Open Banking Concept, which defines the development directions and roadmap for the introduction of API (application programming interface) in Ukraine as a platform for data exchange between payment service providers.
“The introduction of open banking in Ukraine will have a positive impact on the financial services market. In particular, it will contribute to the development of fintech, introduction of innovations in the payment sphere, strengthening competition and, as a result, improving the quality of existing and creating new payment services and products”, – the press service of the regulator reports the words of the deputy head of the NBU Alexey Shaban.
It is pointed out that open banking implies structured and secure data exchange between payment service providers through open APIs.
“We are talking about the development of a new ecosystem based on the application programming interface (API) and designed for the development of payment products and services – more diverse and attractive to customers,” the National Bank notes.
The regulator reminded that according to the law “On payment services” open banking in Ukraine should work in August 2025.
It is specified that open banking provides that banks and other providers of payment services for account maintenance should open their APIs for providers of non-financial payment services with the ability to connect to the interfaces of their services in order to access information on the user’s account and initiate payment transactions.
It is emphasized that in open banking only the user (individual or legal entity) decides who should access his account and a specific amount of information.
The National Bank calls the key advantage of such exchange the opportunity for users of financial services to choose a convenient and modern way of using their accounts, and for businesses to establish mutually beneficial cooperation and get more opportunities to develop their solutions. According to the NBU, with the help of open banking, users will be able to use their account funds more efficiently, using consolidated in one payment application information on the movement of funds and their balance on their accounts opened with different financial institutions.
Unlike traditional banking, open banking relies on the technology network of financial institutions and other non-financial payment service providers to enable them to efficiently share information with the prior consent of the user.
“Thanks to open banking, there will be a transformation of the payment market, stimulating the development of fintechs, new opportunities for the development and scaling of the ecosystem will appear, and the level of competition among payment market participants will increase. At the same time, the regulator will take care of a high level of protection of users’ rights and data security,” the regulator said.
The report notes that the National Bank will determine the basic principles of open banking and directions of its further development in accordance with the urgent needs of the market, as well as will take care of the legal regulation of its work and oversight of compliance of payment service providers with its requirements.
As emphasized in the NBU, technical specifications will be approved by the regulator on the basis of joint developments with market participants.
According to the roadmap for implementation of the concept, in December-February of this year the first version of the technical specifications will be developed by the NBU working groups, also in the fourth quarter of 2023 the first version of the specifications will be agreed by the regulator for testing.
In the first quarter of next year it is planned to form the requirements of stakeholders, in particular, general approaches to the implementation of supervision and protection of users’ rights, IT-security, protection of users’ personal data, as well as to form a list of NAPs (Normative legal acts) and conceptual changes, to determine the legal framework for piloting.
Then, in March-June 2024, the regulator plans to prepare and conduct the first stage of testing of a limited set of APIs and analyze it, identify areas for specification refinement, finalize and develop the second version of technical specifications.
In the second half of 2024, the NBU is going to conduct the second stage of API testing, with a wider set and range of participants, as a result of which the second version of specifications will be prepared. Also, by the end of next year it is planned to approve regulations on authorization, including authorization, finalize the register of payment infrastructure and the procedure of open banking and technical specifications.
