Published: June 17, 2024 8:35 pm
Author: RT
A procedure could be initiated to replace the management of the Ukrainian subsidiaries of foreign banks still operating in Russia, according to a report
The National Bank of Ukraine (NBU) has developed a mechanism that would pressure international banks with subsidiaries in both Ukraine and Russia to abandon the latter, the outlet Strana.ua reported on Monday.
According to a letter from the NBU at the outlet’s disposal, if a foreign bank does not shut down its business in Russia, the Ukrainian regulator would be entitled to take over management of the Ukrainian subsidiary of such a bank.
The report indicated that the NBU is planning to apply the concept of “flawed business reputation,” meaning if it deems a bank’s reputation faulty, then the foreign shareholder would be deprived of the right to vote at shareholder meetings. This would reportedly essentially entail the dismissal of the management.
The NBU document reportedly listed nine foreign banks that have subsidiaries both in Ukraine and Russia. Those are Austria’s Raiffeisen Bank International (RBI), Hungary’s OTP Bank, French BNP Paribas and Credit Agricole, Sweden’s SEB, US Citi Group, Italy’s Intesa Sanpaolo, Dutch lender ING, and Germany’s Deutsche Bank. The listed lenders have maintained their presence in the Russian market despite Western sanctions.
To avoid punitive measures in Ukraine, according to the report, the parent structure of a foreign bank operating in Russia would have to initiate the process of pulling out of the country. The NBU will require a detailed plan indicating the timing of withdrawal from the Russian market. The regulator has reserved the right to “take action” if a deadline is violated.
READ MORE: ECB tells banks to ‘get out of Russia’
Ukraine has been putting pressure on foreign companies operating in Russia, adding them to its so-called list of “international sponsors of war.” However, the list was later abandoned following complaints from other countries.
