Sunday, April 12, 2015

46 Ukrainian banks declare insolvency

Sun Apr 12, 2015 5:54AM
A file photo of Ukrainian hryvnia bills
A file photo of Ukrainian hryvnia bills
Dozens of Ukrainian banks have reportedly gone bankrupt over the course of one year, with Kiev having to rely on external funding from the European Union (EU) amid insufficient insurance funds.
Managing Director of the Ukrainian Deposit Insurance Fund Konstantin Woruschilin said 46 banks in the country have declared insolvency, pointing to a number of contributing factors to the high number of bankruptcy, Russia-based Sputnik news agency reported on Saturday.
Woruschilin said the main factor is “the immoral behavior of bank managers,” with a number of cases involving bank employees stealing money for personal purposes.
Other factors were a drop in the country’s exports, a decline in consumption and high production costs, according to the director.
The Deposit Insurance Fund, which is a government institution, will reportedly not be able to reimburse the bank customers for their losses as its financial resources are insufficient.
The government institution will have to rely on external funding from Brussels in order to meet its obligations.
This comes at a time when Ukraine is struggling with financial problems. Last year, the country’s economy shrank by 7.5 percent as inflation soared, making it the worst economic year for Ukraine in over seven decades.

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