Publication date: 15.07.2024
Protection of depositors' rights in Ukraine
Introduction
Protection of depositors' rights is an important aspect of financial stability and confidence in the banking system of Ukraine. Depositors have the right to keep their funds and receive income from their deposits. In this article, we will discuss the main mechanisms of depositors' rights protection, the legal framework, types of deposit products, rights and obligations of depositors, and measures that can be taken in case of violation of their rights.
Legal framework
The Constitution of Ukraine
The Constitution of Ukraine enshrines the fundamental rights of citizens, including the right to property and protection of their rights in relations with banks. It guarantees equality before the law and the right to judicial protection.
Civil Code of Ukraine
The Ukrainian Civil Code (the "CCU") regulates contractual obligations, including deposit agreements between depositors and banks. The CCU defines the rights and obligations of the parties, as well as the procedure for entering into and performing contracts.
Law of Ukraine On Banks and Banking Activities
This law regulates the activities of banks in Ukraine, establishes requirements for deposit agreements, rights and obligations of banks and depositors, and measures to protect depositors' rights.
Law of Ukraine "On the Individual Deposit Guarantee System"
This Law establishes the legal framework for the functioning of the deposit guarantee system, which provides for the reimbursement of funds to depositors in the event of bank failure.
Regulations of the National Bank of Ukraine (the "NBU")
The National Bank of Ukraine issues regulations governing the procedure for opening and maintaining deposit accounts, requirements for information disclosure and protection of depositors' rights.
Types of deposit products
Time deposits
Time deposits are types of deposits that are placed by depositors for a fixed term with a fixed interest rate. Depositors cannot withdraw funds before the end of the deposit term without losing interest.
Demand deposits
Demand deposits allow depositors to withdraw funds at any time without loss of interest. The interest rate on such deposits is usually lower than on term deposits.
Accumulative deposits
Accumulative deposits allow depositors to make regular deposits over a specified period of time. This helps to accumulate funds and earn additional interest.
Rights of depositors
Right to information
Depositors have the right to receive complete, accurate and timely information on the terms of deposit agreements, including the interest rate, interest accrual and payment terms, withdrawal procedures, etc.
The right to reimbursement of deposits
In the event of bankruptcy, depositors have the right to reimbursement of their deposits within the limits established by the Law "On the Individual Deposit Guarantee System". The Deposit Guarantee Fund ensures repayment of deposits to depositors in the amount not exceeding the established limit.
Right to terminate the agreement
Depositors have the right to terminate the deposit agreement early, subject to compliance with the terms of the agreement, including possible loss of accrued interest.
Right to protection against unfair practices
Depositors have the right to protection from unfair practices of banks, including misleading, deceitful or false information. They can apply to the NBU, the Antimonopoly Committee of Ukraine or the court in case of violation of their rights.
Responsibilities of depositors
Compliance with the terms of the agreement
Depositors are obliged to comply with the terms of the deposit agreement, including the terms of keeping funds, the procedure for withdrawing and replenishing accounts.
Providing reliable information
Depositors are obliged to provide the bank with complete and accurate information necessary for opening and maintaining a deposit account.
Mechanisms to protect depositors' rights
Individual Deposit Guarantee Fund
The Deposit Guarantee Fund (DGF) provides reimbursement of deposits in the event of bank failure. The DGF pays out funds to depositors within the established limit, which is regularly reviewed and approved by the legislation.
Appeal to the National Bank of Ukraine
Depositors have the right to appeal to the NBU if their rights are violated 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
Depositors have the right to apply to the courts to protect their rights in cases of violation of the terms of the deposit agreement or the law. The court may order compensation of losses, impose fines or other measures.
Recourse to other regulatory authorities
In cases of violation of depositors' rights by banks, including the provision of false information or misrepresentation, depositors 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 depositors
Assessment of deposit terms and conditions
Before entering into a deposit agreement, depositors should carefully review the terms of the deposit, including the interest rate, the term of the deposit, the terms of interest accrual and payment, the possibility of early withdrawal, etc.
Keeping documents
Depositors should keep all documents confirming their relationship with the bank, including deposit agreements, deposit receipts, account statements, etc. This will help in case of disputes or the need to go to court or regulatory authorities.
Regular monitoring of accounts
Depositors should regularly check the status of their deposit accounts to detect possible errors or unauthorised transactions in time. If suspicious transactions are detected, they should immediately contact the bank to clarify the circumstances.
Contacting the bank in case of problems
In case of any problems or unclear situations, depositors should contact the bank for clarification and conflict resolution. Most issues can be resolved at the stage of internal complaint handling.
Consultation with a lawyer
In complex cases of violation of rights, depositors may seek advice from a lawyer or attorney specialising in banking law. A lawyer will help assess the situation, prepare a claim or statement of claim, and represent the depositor's interests in court.
Conclusion.
Protection of depositors' rights in Ukraine is an important component of financial stability and confidence in the banking system. The legal framework, which includes laws and regulations, ensures the protection of depositors' rights, and the Deposit Guarantee Fund guarantees the repayment of deposits in the event of a bank failure. Depositors have the right to receive information, protection from unfair practices and judicial protection of their rights.
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