Publication date: 15.07.2024
Bank liability to customers in Ukraine
Introduction
Bank liability to customers is an important aspect of the legal regulation of banking in Ukraine. Relations between banks and their customers should be based on the principles of trust, transparency and compliance with the law. In this article, we will examine the main aspects of banks' liability to clients, the legal framework, types of liability and mechanisms for protecting clients' rights.
Legal framework
The Constitution of Ukraine
The Constitution of Ukraine enshrines the fundamental rights of citizens, including the right to protect their rights and interests in relations with financial institutions, such as banks. It guarantees the right to go to court, equality before the law and protection from unfair practices.
Civil Code of Ukraine
The Civil Code of Ukraine (the "CCU") is the main legal act governing civil law relations, including relations between banks and their customers. The CCU defines general provisions on contracts, liability for their breach and protection of the parties' rights.
Law of Ukraine On Banks and Banking Activities
This law establishes the legal framework for the operation of banks in Ukraine, regulates their relations with customers, defines requirements for banking activities and liability of banks for violations of the law.
Law of Ukraine "On Protection of Consumer Rights"
This law regulates relations between consumers and suppliers of goods and services, including financial services. It establishes consumer rights, supplier obligations and consumer protection mechanisms.
Types of liability of banks to customers
Civil liability
Civil liability of banks to their customers arises in cases of breach of contractual terms, non-compliance with the law or damage to customers. The main forms of civil liability are as follows:
Compensation for damages: the client has the right to claim compensation for damages caused by the bank as a result of breach of contract or non-compliance with the law. Damages may include direct losses, lost profits and non-pecuniary damage.
Penaltiesand fines: in case of violation of the terms of fulfilment of obligations, the bank may be obliged to pay a penalty or fine provided for by the agreement or legislation.
Administrative liability
Administrative liability is incurred in cases where banks violate the requirements of the legislation governing banking activities. This may include:
Fines: imposition of administrative fines on a bank for violation of regulations of the National Bank of Ukraine or other regulatory authorities.
Restrictions on activities: imposition of restrictions on certain types of banking operations or temporary suspension of the bank's activities.
Criminal liability
Criminal liability may arise in cases where a bank's violation of the law has signs of a crime, including
Fraud: misappropriation of customer funds or provision of false information for the purpose of obtaining benefits.
Money laundering: conducting transactions related to the legalisation of the proceeds of crime.
Corrupt practices: participation in corrupt schemes or providing undue benefits to public officials.
Mechanisms for protecting clients' rights
Internal procedures of the bank
Banks should have internal procedures for handling customer complaints and grievances. This includes the establishment of special units or the appointment of responsible persons to deal with customer complaints and resolve conflicts.
Appeal to the National Bank of Ukraine
Customers have the right to appeal to the National Bank of Ukraine (NBU) in cases of violation of their rights by banks. The NBU supervises the activities of banks and has the authority to impose sanctions on them in cases of violation of the law.
Judicial protection
Customers have the right to apply to the courts to protect their rights and interests in cases of breach of contractual terms and conditions or breach of the law. The court may order compensation for losses, impose fines or apply other enforcement measures.
Recourse to other regulatory authorities
In cases of violation of consumer rights by banks, customers may apply to other regulatory authorities, such as the Antimonopoly Committee of Ukraine, the State Service of Ukraine for Consumer Protection, etc.
Practical advice for clients
Keeping documents
Customers should keep all documents confirming their relationship with the bank, including agreements, receipts, account statements and other documents. This will help in the event of disputes or the need to go to court or regulatory authorities.
Regular monitoring of accounts
Customers should regularly check the status of their bank accounts to detect possible errors or unauthorised transactions in time. In the event of suspicious transactions, you should immediately contact the bank to clarify the circumstances.
Contacting the bank in case of problems
In case of any problems or unclear situations, customers should contact the bank for clarification and conflict resolution. Most issues can be resolved at the stage of internal complaints.
Consultation with a lawyer
In complex cases of violation of rights, customers may seek advice from a lawyer or attorney specialising in banking law. The lawyer will help assess the situation, prepare a claim or statement of claim and represent the client's interests in court.
Conclusion.
Bank liability to clients is an important element of the legal regulation of banking activities in Ukraine. It includes civil, administrative and criminal liability for breach of contractual terms, violation of legislation or causing damage to customers. Customers have the right to protect their rights through internal bank procedures, appeals to regulatory authorities, courts and other mechanisms. Banks' compliance with the law and ensuring transparency and trust in their relationships with customers are key factors in the stability and reliability of the Ukrainian banking system.
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