Rise and development of the banking system of Ukraine

OPENING A BANK ACCOUNT

According to the Law of Ukraine On Banks and Banking" of March 20, 1991, No. 872-XII, entities of business activity have the right to choose a bank. They can open settlement (current) accounts and other accounts for keeping monetary costs with a bank and executing all banking operations in any bank of Ukraine of their choice and with the consent of the bank according to the procedure determined by the National Bank of Ukraine. Before providing adequate conditions for control over executing operations on accounts in banks, including tax payments and all compulsory payments, till January 1, 1999, entities of business activity have the right to open settlement accounts in no more than two banks of Ukraine. Business activity entities, within three working days from the day of opening or closing the next account in bank, determine one of the accounts in national currency as the main one. Indebtedness, which is written off beyond doubt, has to be added on the latter. Business activity entities have to inform appropriate tax inspectors and the bank, in which they open an extra account. Taxation organ has the right to apply financial sanctions for unduly informing banks or business activity entities about opening or closing accounts in banks in sum of Hr 20.17 - 100.17 Hr 340 - 1700 The procedure for opening accounts in banks in Ukraine is established by the Regulation No.3 "On Opening Accounts in National and Foreign Currency by Banks", which was approved by the Resolution of the Boards of Directors of the National Bank of Ukraine, No.121 of May 17, 1996. Granting a copy of the document, which proves the fact of having been taxation registered, is one of the important terms of opening banking accounts.

V. Read and retell the following text:

The rise and development of Ukraine, similar to that of the other countries arising on the ruins of the USSR, is a unique phenomenon in the modem history. From a single "ruble zone" the national monetary and banking systems have separated. The elements and structure that earlier have not existed were given birth and are progressing: these are central banks and commercial banks, the national currencies, the systems of payments, currency exchanges, systems of the bodies engaged in regulation and bank supervision.

Playing a special role in the economic system as a whole and on the monetary-credit market, banks actively effect all the constituents of economic reform.

It is the banking system that is to create the infrastructure, methods and tools of the new market-oriented regulation of the economy to replace the command-administrative methods and instruments.

At the stage of transition to a market-oriented economy, there are only a few factors that can equal an efficient system of management of financial and monetary-credit relations in importance (practically the core of this system - stable and actively functioning structure of commercial banks).

The banking system in a market-oriented economy plays a triune role. First, the structure of commercial banks administers the system of payments. In developed market relations the colossal number of market transactions is accomplished by way of redistribution of funds between different banking deposits.

Second, together with other financial intermediaries, banks direct the savings of the public to firms and commercial enterprises. The effectiveness of the fulfillment of the process of investing funds mostly depends on the capability of the banking system of directing monetary resources to those loan debtors, who would find the opportunities to utilize them efficiently.

Third, acting in accordance with monetary-credit policy of the central bank, the banking system regulates the quantity of money in circulation.

Stable and temperate growth of money supply balanced along with the growth of commodity supply is a guarantee of the provision of a steady level of prices. As soon as this is achieved, market relations influence the economic system in the most effectual and gainful manner.

The rise and development of Ukraine's banking system has proceeded in extremely adverse conditions. The most important of these include: the destruction of resources with respect to Ukrainian banks as part of a central Russia-based system in 1990-1991; the economic crisis, which manifested itself in the massive, powerful depression of production; the decline of gross domestic product, the keen decrease in the citizens' incomes; and continued inflation. The tax pressure of 1994 also negatively affected banks. Another factor that affected the banking sector was the public attitude toward banks. These factors accompanied the transition process in Ukraine's economy for several years. However, contrary to difficulties, the banking system of Ukraine has proceeded step by step in its evolution towards the stabilization of its role in the society and economy.

VI. Write a resume of the text given below:

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