The National Bank of Ukraine (NBU) has updated the requirements for the capital structure of banks in accordance with the legislative changes defined by the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding the Improvement of Corporate Governance in Banks and Other Issues of the Banking System" (No. 1587-IX of June 30, 2021), the NBU press service reports.
According to the new regulations, banks are required to implement a new (three-tier) capital structure from August 5, 2024.
The regulation defines the procedure for calculating the primary capital of level I, additional capital of level I, capital of level II and defines the requirements for their components. The procedure and conditions for obtaining permission or approval of the National Bank by the bank for the inclusion of certain components in the capital are also established.
It is noted that the introduction of new requirements will be carried out in stages:
- by April 1, 2024, banks must develop internal regulations on determining the amount of regulatory capital;
- from April 1 to July 1, 2024, conduct test calculations and report their results to the NBU;
- from August 5, 2024, start calculating the regulatory capital in accordance with the new requirements.
It is noted that this step is part of the National Bank's efforts to bring regulatory and legal acts in the field of banking regulation closer to European Union standards. Compliance of capital with established requirements should ensure its ability to effectively absorb losses arising from banking risks.
