regulates and supervises commercial banks. However, the NBU's
resources are often insufficient to provide for thorough supervision
and regulation. It is anticipated that there will be significant
amendments to the current legislation governing banking activities.
he fact that most of the
commercial banks are lending to financially strapped enterprises
has resulted in instability in the Ukrainian banking system. Foreign
investors may confront delays in transferring funds both domestically
and internationally, converting currency and repatriating profits
in foreign currency (although the situation is rapidly improving).
In addition, state authorities such as the tax inspectorate have
wide-ranging powers to freeze bank accounts or to withdraw funds
for payment of taxes or fines without the need to obtain a court
order or authorization.
wo foreign banks, Credit
Lyonnais and Societe General, have opened wholly owned subsidiary
commercial banks. Other foreign banks are attempting to obtain
a banking license, although there appears to be considerable opposition
within the NBU for the granting of further banking licenses to
subsidiaries of foreign banks.