The National Bank of Ukraine cautioned local users from trusting Revolut with their funds as, without a proper license, the rights of consumers and the deposit guarantee system do not apply to the fintech’s customers in the country.
Upon a recent Revolut’s announcement that the firm enters the Ukrainian market, local banking regulator – the National Bank of Ukraine (NBU) – rushed to clarify that the fintech had never submitted any relevant applications or passed the licensing procedure that would legalise its financial activities in the country.
As was reported earlier, Revolut aims to provide its services to the Ukrainian citizens through Revolut Bank UAB, which is a banking entity registered in Lithuania. It operates based on a license that allows it to enter the European Union markets. As we know, at present, Ukraine is not a part of the EU, nor is the joining process scheduled for any foreseeable future. Therefore, according to the Ukrainian laws, Revolut has no right to cater to the local customers.
The applicable forms of entering the market properly would be either to establish a branch of a foreign bank in Ukraine or obtaining a banking license in the country. Both variants require the NBU approval as well as its comprehensive assessment of the firm’s business reputation, its financial condition, and the proposed business model. However, Revolut so far hasn’t attempted any of the legalisation procedures. Accordingly, it could not have received any licenses or permits from the National Bank of Ukraine
Although NBU emphasized that it supported open competition and the development of financial technologies, which prove indispensable in such critical times for the country at war, the regulator also considers it inappropriate for select market participants to act outside the limits of legislative and regulatory requirements.
Besides, if Ukrainian citizens use the services of an unregistered and unlicensed financial entity, they cannot receive proper consumer protection and deposit guarantees, which could be a very undesired outcome for many Revolut users. While no legal actions have been taken against Revolut to date, the NBU has indicated it will take necessary measures to ensure the stability of Ukraine’s banking system and protect consumers’ interests, thus, urging the firm to follow the relevant procedure to comply with Ukrainian legislation and regulatory requirements.
