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kraine has a banking system in the process of development. It is two-tired, with the NBU and approximately 200 commercial banks. Of the commercial banks, five are the former specialized state banks: one is a savings bank; three are specialized lending banks (industrial investment, agricultural and social development) and one is the Export-Import Bank of Ukraine. The three specialized lending banks receive concessionary treatment from the NBU and are responsible for the vast majority of enterprise lending.

he NBU 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.
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