Banks agree to lower transfer limits for customers without verified income

On December 10, the NBU hosted a press briefing with the heads of the Independent Association of Banks of Ukraine (NABU), the Association of Ukrainian Banks (AUB), PrivatBank, Oschadbank, Raiffeisen Bank, Universal Bank, and the NBU to sign a Memorandum on Ensuring Transparency of the Payment Services Market (hereinafter referred to as the Memorandum).

The Memorandum concerns the interaction of banks and payment service providers with individual customers, individual entrepreneurs and individual entrepreneurs as part of a group of related companies, improves and standardizes banks' approaches to monitoring customer transactions using a risk-based approach, which will eliminate the possibility of unfair competition.

This is an initiative of the banking sector aimed at reducing the shadow economy and countering Russia's terrorist and sabotage activities financed through the use of "drops." It aims to prevent fraudsters and other criminals from using cards and payment infrastructure.

The document will also help bring current banking market practices in line with common standards and requirements of EU legislation.

The Memorandum was developed by the NABU and the AUB and supported by the NBU. The Memorandum is open for signing by all Ukrainian banks that are willing to comply with the principles declared in it.

To date, four major issuing banks have signed the Memorandum: JSC Oschadbank, JSC CB PrivatBank, JSC Raiffeisen Bank, JSC Universal Bank, and other banks and payment service providers have expressed their intention to join the Memorandum in the near future.

Key points of the Memorandum

The payment service providers that have joined the Memorandum agree to implement unified market practices and approaches in their activities, including the following processes

► due diligence of customers at the stage of establishing business relations;

► monitoring of financial transactions on customer accounts in accordance with the available information about the customer and the actual transactions;

► establishing automated round-the-clock rules for monitoring payment transactions with special attention to monitoring and limiting transactions at night (from 24:00 to 06:00) to identify cases of uncharacteristic financial behavior and counteract fraudulent schemes, theft of funds through social engineering, and preventing customers from participating in drop schemes;

► establishing rules for conducting financial transactions (providing products/services) of customers in accordance with agreed approaches and procedures based on a risk-based approach;

► exchange of information between the banks participating in the Memorandum on customers and their activities that contain signs of suspicion in accordance with the requirements of applicable law and regulations of the NBU.

By signing the Memorandum, payment service providers undertake to process customer transfers based on the risk-based approach implemented by the bank. This means that banks will not set limits on transactions of customers with confirmed sources of income (including salary customers and other customers with confirmed income), as well as volunteers identified by the payment service provider in accordance with the requirements of NBU Board Resolution No. 18 dated 24.02.2022.

If there is no documented income, banks are obliged to set limits (applicable to transfers to IBAN details) on transactions:

• from 01.02.2025 - for clients of "high" risk level to set a limit of up to UAH 50 thousand per month;

• for clients of "medium" and "low" risk levels - in accordance with the limits and terms of phased implementation:
  • from 01.02.2025 - in the amount of up to UAH 150 thousand per month
  • from 01.06.2025 - in the amount of up to UAH 100 thousand per month.

The limits will not include transactions for the transfer of funds between two accounts opened by the client in the same bank. If the client has documented income that exceeds the limit set on the date, banks will make transfers within the limits of the confirmed income.

In addition, during the service, the client has the right to apply to the payment service provider participating in the Memorandum with a request to increase the established limit with the obligatory provision of documentary evidence of funds.

In order to build a more effective risk management system, payment service providers participating in the Memorandum emphasize the need to implement systemic steps and cooperate with the National Bank of Ukraine and government agencies in terms of

• Providing participants with access to official information through the online public service Diia (hereinafter - Diia) on customer income, court cases, etc;
• creation of a centralized register of suspicious customers, including those with a "drop" sign, as an additional source of information for customer research when establishing/reviewing business relations.

"I thank market participants for their high level of self-organization and proactive cooperation. We look forward to fruitful cooperation with the banking sector and other government agencies. Any limits should be replaced by an effective risk-oriented approach and financial monitoring," said NBU Governor Andriy Pyshnyi at a briefing, "After all, we have a common goal - to reduce the share of the country's shadow economy to increase state budget revenues through tax payments. And also to reduce the risks of terrorist and sabotage activities that threaten absolutely everyone, thus strengthening the country's defense and protection."

"Banks are a responsible partner of the state and know how to unite. Currently, the volume of fraudulent drops traffic passing through the financial system is quite significant. And it has to be stopped. Therefore, NABU held a broad discussion with the participants and proposed to find common approaches to customer service and transaction support. We realized that only by combining our efforts we can achieve results and gradually oust the shadow sector from the financial system of Ukraine," commented Volodymyr Mudryi, Chairman of the Board of the Independent Association of Banks of Ukraine.

"Today we are presenting the result of the joint work of the banking sector aimed at ensuring the transparency of the banking payment services market. Our banking system is not only stable and highly liquid, but also responsible, as the introduction of unified approaches demonstrates maturity and readiness to meet challenges. The vast majority of ordinary users of banking services will not be affected by the proposed limits. The main goal of the Memorandum is to counteract the illegal use of the Ukrainian payment infrastructure and create a level playing field for all market participants. We are confident that the initiative will be supported by all banks and non-bank payment service providers," said Andriy Dubas, President of the Association of Ukrainian Banks.