D) Improvement of the system of inter-bank settlements

One essential function of the National Bank is the provision of normal settlements in the national economy. It is known that due to the earlier existing system of settlements which included payment requisitions and the system of collection of payments, significant amounts of debtor-creditor indebtedness had been created in the national economy. Settlements used to take 20-30 days on average.

Therefore, the new procedure of inter-bank settlements, which was originated by the Concept of Electronic Monetary Circulation in Ukraine (developed in late 1992), played an important role in the reforming of payment technologies in the banking system. Now this idea has already been put into life -- the national payment system has been created. Gradual steps -- from the imposition of the new procedure for inter-bank settlements via correspondent accounts of commercial banks‚ to the establishment (in June of 1993) of the Central Clearing Chamber, the Center for Interstate Settlements and the National Payment Council -- brought us nearer to the main goal -- the imposition of the System of Electronic Payments (SEP) -- in January 1994.

This offered the opportunity to reach world class quality of processing of information in the field of inter-bank settlements‚ to considerably upgrade security‚ to restrict the risk of circulation of fraudulent money and to minimize the term of the passage of payments. The SEP excludes the necessity of paper technology and allows settlements to be conducted in a few hours both between several banks and in the national economy on the whole. The reduction of the term of the passage of payments presented the opportunity to decrease the volume of cash in turnover‚ enabled banks to more efficiently use their resources, clients and funds‚ and provided the National Bank of Ukraine with an instrument to control and regulate monetary circulation. Information‚ which passes via the SEP‚ is securely defended against non-permitted interference‚ possesses a multi-level protection‚ that is being continuously improved and developing. Today, one may state that in terms of protection, our system is the best among similar systems operated in the CIS member states‚ and the uniqueness of its software puts it into one of first places in Europe.

The automation of the market for bonds of internal government loan also improved inter-bank settlements.

With the goal to reduce cash circulation of the national currency the National Bank, together with commercial banks, made a decision about putting plastic cards into the practice for non-cash settlements of physical persons. Specialists of UKRKART LLC and the NBU developed the design of the National System of Settlements based on international experience.

The existing system of inter-bank settlements currently satisfies the needs of Ukraine's economy. But with allowance for the perspectives of the revival of economic activity in the country and the increasing requirements of participants of settlements to the levels of safety and quality of servicing, the necessity arose to create a generation of payment systems on the basis of the new conceptual‚ technological‚ technical and software. The National Bank of Ukraine develops the next generation design of such a system.

The year 1998 is a year of the transition of Ukraine's banks to the system of international accounting standards (IAS). Transition to the new system of accounting will allow Ukrainian banks to communicate with western financial circles‚ to shift from the existing accounting «for needs of taxation» to accounting «for need of the manager», where priority is given to administration of a bank as an integrated system.

Date: 2015-01-11; view: 871