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 Privatbank partially freezes corporate accounts as interim measure

Privatbank corporate payments suspended on Dec. 19 for one day will be possible with certain restrictions from Dec. 20.

Privat24 for business online system has notified that on Dec. 20, debit transactions are possible within the amount not exceeding the balance as of Dec. 19. All credit limits, overdrafts, limits on guaranteed payments and business installment are zeroed or reduced to the level of debt, Censor.NET reports citing UNIAN.

All receipt transactions are processed without restrictions.

Read more: EBRD might take stake in Privatbank 'if all goes well,' - Reuters

"For example, an account balance as of the morning Dec. 19, 2016 was 100,000 hryvnia. This amount becomes the 'minimum balance.' From that moment, the account received incoming payments (from counterparties, compensation for acquiring, revenue, etc.) totaling 50,000 hryvnia, and the account balance is now 150,000 hryvnia. Accordingly, only this 50,000 hryvnia can be used for transactions, including those with the card," the bank explains.

"Such corporate customer service mode is temporary. All decisions as to its future alteration will be made by Mr. Shlapak as soon as he assumes his duties as the board chair," the report notes.

Read more: 116B hryvnia needed for additional capitalization on Privatbank will be attributed as public debt, - NBU Head Hontarieva

On Dec. 18, the Cabinet of Ministers announced its decision to nationalize Privatbank, the largest privately-held bank of Ukraine. The government intends to issue 30-year domestic government loan notes worth 150 billion hryvnia ($5.54 billion) and become a 100-percent owner of the bank. The bank's first deputy CEO announced the decision was made after an unprecedented information attack on the bank and a threat it posed to its clients. The bank's leadership assured the clients their savings will be safe, naming it the key condition in the talks. In his turn, Minister of Finance Oleksandr Danyliuk confirmed the clients' money will be safe and protected by the state. Due to the nationalization procedure, Privatbank halted corporate transactions for one day, till 9 a.m. Dec. 20.

According to the National Bank of Ukraine, Privatbank needs 148 billion hryvnia in additional capitalization. The finance minister said that after Privatbank is stabilized, the state plans to sell it. In turn, President Poroshenko said the state guarantees safety and integrity of the client's funds.

On Dec. 19, the National Bank of Ukraine allocated 15 billion hryvnia to maintain the liquidity of Privatbank.

The decision on the Privatbank nationalization has been supported by IMF, EBRD, the G7 countries, the EU and the U.S.

Minister of Finance Oleksandr Danyliuk claims the bank was made insolvent and those guilty should be held accountable.
 
 
 
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