НаціональнийбанкУкраїни national bank of ukraine 1 international money...

Національний Національний банкбанк

УкраїниУкраїни

National Bank of Ukraine


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International money transfer systems in Ukraine:

regulation, analysis of activityand oversight

Elena A. MakhayevaHead of Payment Systems Oversight and Settlement

Systems Division,National Bank of Ukraine, Ph.D in Economics.

20 May 2011





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Regulation of payment systems operationin Ukraine

The Law of Ukraine“On payment systems and money transfers in Ukraine”, 04.2001

Payment systems (PS) created by residents of Ukraine

Article 9

9.2. Operating procedures of a PS are determined by its regulations set out by the payment organisation (PO) of this PS

9.2.1. The rules of the PS must set out the following: the PS organisational structure, the terms of membership/participation in the PS, the order of joining/quitting the PS, the order of dispute settlement, the PS risk management, the PS information security system … 9.3. The rules of the domestic PS and international PS, whose PO are

residents, must be agreed upon between this PO and the NBU





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Regulation of operation of members/participants of international payment systems

The Law of Ukraine“On payment systems and funds transfer in Ukraine”, 04.2001

International PS created by non-residents

Article 12

12.1. Banks as well as NBFI that have a license granted by the State Commission on regulation of financial services markets in Ukraine for transferring funds, are eligible to enter into agreements with the PO of the IPS on membership or participation in these systems.

Banks as well as NBFI are obliged to register the concluded agreements according to the procedure established by the NBU

12.3. When registering agreements, the National Bank of Ukraine is entitled to request the documents showing the procedure of banks and NBFI for transferring funds within these IPS in the territory of Ukraine.





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Regulation of operation of domestic andinternational payment system

Resolution on functioning of domestic and international payment systems in Ukraine

(the National Bank of Ukraine resolution # 348 dated 25.09.2007,amendment # 165 dated 05.06.2008, amendment # 6 dated 05.01.2010)

are applied to:

PS, PO – residents of Ukraine (bank and non-bank institutions, domestic and international

organisations, interbank clearing systems, card PS, systems of transferring funds between individuals, … )

Members/participants IPS, PO – non-residents (agreement with a non-resident)

The NBU acts as an electronic register of payment systems and their members and participants





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International funds transfer systemscreated by non-residents

Ukraine is the recipient of cross-border transfers of funds

1 530

2 065

2 5352 263

2 615

139 191382 298 378

0

500

1 000

1 500

2 000

2 500

3 000

2006 2007 2008 2009 2010

to Ukraine

from Ukraine

Bar chart 1. The dynamics of amounts of cross-border transfers eff ected through

international funds transfer systems created by non-residents

in millions of UAH(equivalent)





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I. Russia

1. Unistream 7. InterExpress 2. CONTACT 8. BLIZKO 3. LEADER 9. ALLUR 4. Anelik 10. Blitz 5. Fast mail 11. Zolotaya Korona – Money Transfer 6. MIGOM II. USA III. Other countries

12. Western Union 17. Coinstar (Great Britain) 13. MoneyGram 18. Xpress Money (Great Britain)14. VIGO 19. Money Exchange (Spain)15. U.S. Money Express 20. MEEST

(Canada)16. RIA Financial Services 21. Faster (Kazakhstan) (RIA Money Transfer) 22. Caspian Money Transfer (Azerbaijan)






The breakdown of the international money transfer market by the volume of funds received in Ukraine in 2010






2010

received sent

Russia 50 % Russia 42 %USA 9 % Georgia 6 %Italy 7 % Армения 4.5 %Spain 5 % Uzbekistan 4.5 % Great Britain 3 % USA 4 % Other countries 26 % Other countries 39 %

Average transfer amount USD 508 USD 520





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Participants of international money transfer systemscreated by non-residents

√ banks > 150 (85 %) 22 systems VTB Bank

Privatbank 10 agreements Oshchadbank

Wolksbank 9 agreements

Ukrgazbank SKB-bank 8 agreements Ukrgazprombank √ non-bank financial Ukrainian institutions Financial 6

Group

√ State post enterprise USEP UKRPOSHTA 4





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International money transfer systemscreated by non-residents

2010 cross-border transfers

Currency code

to Ukraine from Ukraine

Number of transfers

Total volume(in thousands

of transfer currency

units)

+/- Number

of transfers

Total volume(in thousands

of transfer currency

units)

+\-

USD 3,254,488 1,801,322 ↑ 11 % 526,079 277,700 ↑ 18 %

EUR 946,417 317,260 ↑ 19 % 66,724 33,610 ↑ 58 %

RUB 823,434 10,979,570 ↑ 108 % 130,946 1,659,833 ↑ 75 %

CAD 3,601 2,623 ↓ 9 %

UAH 120,704 214,668 ↓ 69 % 2,773 7,519 ↓ 65 %





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2010 domestic transfers

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International money transfer systemscreated by banks of Ukraine

Name of system

and payment organisationCurrency

codeNumber of transfers

Volume of transfers(in thousands of

transfer currency)

AVERS,

Finance and Credit Bank

UAH 122,907 1,511,908

USD 2,426 7,521

Aval-Express,

Reiffaisen Bank Aval UAH 562,970 1,259,537

SOFT,

Ukrsotsbank

UAH 313,542 1,881,757

USD 11 27

EUR 24 84

Privat-Money,

PRIVATBANK

UAH 2,453,147 6,158,953

USD 4,265 6,415

EUR 733 680

TOTAL

UAH 3,452,566 10 812,185

USD 6,702 13,963

EUR 757 764





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Cross-border transfers in 2010

including partner banks and partner systems

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International money transfer systemscreated by banks of Ukraine

Name of system

and payment organisation

to Ukraine from Ukraine

Number of transfers

Volume of transfers

(in thousands USD)

Number of transfers

Volume of transfers

(in thousands USD)

AVERS,

Finance and Credit Bank

130,662 772,280 28,189 19,502

Privat-Money,

PRIVATBANK319,775 293,028 120,307 51,041

SOFT,

Ukrsotsbank 99,171 49,796 24,872 10,162





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The global trend is the strengthening of the role of the Central Bank in the payment systems area

Oversight as a function of the modern Central Bank

The NBU Board approved the concept behind implementation of oversight of payment systems in Ukraine - the main NBU policy regulations on implementing the oversight - in their resolution # 426 dated 25.09.2010

Payment systems oversight is a function of the Central Bank on monitoring, evaluating payment systems operation and, if required, introducing changes into their activity

The concept behind introduction of oversightin Ukraine





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Oversight in countries of the worldPayment Systems Worldwide, WB, 2008

oversight is exerted by the Central Bank of the regular basis

Central banks of the states number %

Total number (out of 128 central banks) 92 72%

By income level per capitaHigh (41) 36 88%Above average (27) 22 81%Below average (37) 19 51%Low (23) 15 65%By regions of the worldEC States-15 (15) 15 100%New ЕС members (12) 8 67%Other developed states (14) 12 86%East Asia and the Pacific countries (10) 8 80%Europe and Central Asia (16) 12 75%Latin America and Caribbean countries (23) 10 43%Middle East and South Africa (12) 6 50%South Asia (6) 3 50%Africa to the South of Sahara (20) 14 70%By the number of population> 30 million (34) 29 85%> 5 million, < 30 million (48) 32 67%5 million or less (46) 31 67%





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Goals and objectives of the oversight reliability and effectiveness of Payment and Settlements systems the NBU establishes requirements for PS and SS and evaluates the system on this basis

Oversight principles - transparency;- international standards; General principles for international remittance services BIS, World Bank, 2007- authorities and possibilities to conduct effective oversight;- consistency (the same requirements are to be applied to all PS, inclusive of the National Bank of Ukraine PS);- cooperation with other state regulators and the Central Bank

Oversight is applied to:- systematically important PS;- systems of retail payments and settlements, payment means and payment instruments;- settlement systems on security agreements;- members and participants of international PS created by non-residents

The concept behind introduction of oversightin Ukraine





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Thanks for your attention!

http://www.bank.gov.ua

“Payment systems”

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