The NBU has responded by clarifying that Revolut must meet Ukrainian legal requirements, including securing a banking license, before operating as a bank in Ukraine. Below is an overview of the situation and its implications for customers.
1. Summary of the NBU’s Position
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No NBU Authorization
- Revolut Bank UAB, though licensed in Lithuania to provide financial services across the EU, has no Ukrainian license or approval from the NBU to operate domestically.
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Banking Legislation
- Under Ukraine’s Law on Banks and Banking, a foreign bank must either establish a branch in Ukraine or obtain a Ukrainian banking license.
- Both options require prior NBU permission, which Revolut has not sought.
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Assessment of Business Model
- Before granting any license, the NBU would conduct a comprehensive evaluation of Revolut’s finances, corporate structure, and the founder’s business reputation.
2. Customer Protections and Risks
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No Local Consumer Protections
- Because Revolut lacks formal authorization in Ukraine, it does not fall under Ukrainian financial consumer-protection laws.
- The deposit guarantee system in Ukraine also does not apply to Revolut’s customers.
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EU vs. Ukrainian Legal Regimes
- Revolut Bank UAB operates under an EU license; thus, any consumer protections are those of the European Union or Lithuanian jurisdiction.
- Ukrainian users dealing with Revolut effectively engage with a foreign-licensed entity, meaning local recourse could be limited if disputes arise.
3. Implications for Customers
- No Deposit Guarantee
- Funds held in a Revolut account are not safeguarded by Ukraine’s deposit guarantee fund, which normally protects customers of Ukrainian banks.
- Potential Legal Uncertainty
- If complications occur (e.g., account disputes or consumer issues), customers may have to resort to Lithuanian or EU dispute-resolution channels, not Ukrainian courts specifically dealing with licensed banks.
- NBU Advisory
- The NBU advises caution since no official supervision can be exercised over Revolut’s Ukrainian operations and it cannot ensure compliance with Ukraine’s consumer protection standards.
4. Path Forward for Revolut in Ukraine
- Licensing Route
- Revolut Bank UAB must either open a Ukrainian branch of a foreign bank with NBU approval or obtain a banking license in Ukraine to comply with local law.
- Possible Next Steps
- Submission of the appropriate applications for an NBU license.
- Meeting requirements for capital, management structures, and risk controls consistent with Ukrainian regulations.
- Continued Operation Risks
- Until licensing is secured, Revolut operates in a legal grey area in Ukraine, and users bear extra legal risk when transacting.
Conclusion
Revolut’s launch in Ukraine without an NBU license means that Ukrainian consumer-protection laws and the nation’s deposit guarantee system do not cover its customers. While Revolut’s EU credentials still offer some level of protection, the NBU stresses that all foreign banks must follow Ukraine’s licensing procedures to operate lawfully. As of now, any Ukrainian using Revolut services should do so understanding the potential legal uncertainties and lack of local recourse in case of a dispute.
