"The fund guarantees each depositor of participating banks reimbursement of funds, including interest, in the amount of the total sum of deposits in one bank, but not more than UAH 8,000," the statement says. The same applies to clients of banks that are temporary participants of the fund, if the funds were attracted as a deposit before the moment the financial institution was transferred to this category.

This decision of the fund takes effect from February 18.

The changes made by the fund regarding the reimbursement amount have caused different reactions among clients and banks. "UAH 8,000 is a very small sum," believes the head of the Union for the Protection of Depositors and Consumers of Banking Services, Neli Bosiieva. "I am surprised that the compensation amount was increased by only UAH 3,000. Last autumn I was present at a discussion on the question of the necessary reimbursement amount for depositors, and at that time the senior leadership of the National Bank spoke of UAH 15,000."

She is alarmed that the fund increased the compensation amount. "Perhaps this means that the number of banks in a state of liquidation will soon increase," Bosiieva suggests.

A different opinion is held by the deputy chairman of the board of Bank "Finances and Credit," Serhii Borysov. "The fact that the compensation amount will increase is very good. After all, the level of protection of the client's savings is rising," he says. In his opinion, UAH 8,000 is the optimal sum in this case. "If the compensation amount were increased further, the financial burden on the banks participating in the fund would grow. And this would already lead to negative consequences," Borysov believes.

The last time the fund increased the amount of guaranteed payments to depositors of banks under liquidation was at the end of April 2005 — from UAH 3,000 to UAH 5,000. However, clients and some market participants expressed concern about what they considered such a low level of compensation. Thus, at the end of last year, the management of Oshchadbank criticized the fund's activity, calling it ineffective and the reimbursement amount too low.

At the same time, the first deputy chairman of the board of Oshchadbank, Andrii Pyshnyi, stated in an interview with "DELO" that the bank is developing a new concept for insuring the population's deposits, which envisages a minimum guaranteed reimbursement amount of UAH 50,000.

The Magnificent Five

Currently, the Individual Deposit Guarantee Fund reimburses payments to clients of "Rostok Bank," "Nash Bank," "OLBank," Premierbank and Bank "Alonzh."

The fund has 159 permanent participants and five temporary ones (currently these are Bank "Uneks," "Stolychnyi," "Garant," Ukrainian Credit Bank, InterContinentBank).

Published in the newspaper "DELO" No. 76 of February 13, 2006.