National Bank of Ukraine states that Revolut has not applied for a banking license in Ukraine — what is going on?

The National Bank of Ukraine has issued a statement emphasizing the need for the British neobank Revolut to obtain a banking license in Ukraine.

"Revolut Bank UAB is a Lithuanian-based foreign bank that provides financial services under a license that allows it to operate in European Union countries. According to the Law of Ukraine On Banks and Banking, the only permissible forms of doing banking business in Ukraine are by establishing a foreign bank’s branch or by obtaining a Ukrainian-issued banking license. Either of these options requires the NBU’s permission. When considering an application to open a branch or obtain a license, the NBU conducts a comprehensive assessment of the founder’s business reputation, financial standing, and proposed business model," the NBU's states.

According to the NBU, Revolut Bank UAB has not received any licenses or permits from the National Bank of Ukraine, has not submitted any relevant applications, and is not undergoing the licensing process.

"We support open competition and the development of financial technologies, but we also deem it necessary to stress that all market participants must meet legislative and regulatory requirements," the NBU adds.

The NBU also notes that Ukrainian legislation on consumer protection in financial services and on the deposit guarantee system does not apply to Revolut customers.

Oleh Horokhovskyi, co-founder of Monobank, also commented on the issue.

Oleh Horokhovskyi

"Revolut has not applied to the regulator, has not received any permits and is operating illegally on the Ukrainian market. We would be happy to see Revolut in Ukraine, but it should be done with respect for Ukrainian laws. Nowhere else in the world would such a "market entry" be possible. Needless to say, we were not allowed to enter Poland for no reason at all, and here Revolut is acting as if Ukrainian laws do not deserve any attention at all. I respect and support the principled position of the Ukrainian regulator.

On February 11, financial app Revolut announced the expansion of its services to Ukrainian citizens. In an interview with AIN, Head of New Market Launch Dmytro Strelchuk said that "There are no obstacles to obtaining a banking license in Ukraine." However, Strelchuk also noted that Revolut is currently looking for "a specialist who can work on the banking license and everything related to the legal aspect in Ukraine."

When asked about competition in Ukraine, Strelchuk said: "Ukraine is a highly competitive market. Our business models with monobank differ — Revolut is a global bank operating in 40+ countries with a $45 billion valuation."

As a reminder, according to Ukrainian law, banking services include

1. Collection of funds and refundable precious metals from an unlimited number of persons.
2. Opening and maintaining current (settlement, correspondent) accounts of clients, including in bank metals, and trust accounts.
3. Providing funds and precious metals on credit by attracting funds and precious metals to deposits, including current accounts, in its own name, on its own terms and at its own risk.

Neobank's announcement about the expansion of its operations in Ukraine stated: "Starting today, Ukrainian residents will be able to seamlessly open a European Revolut account and experience an array of innovative products like sending instant, fee-free P2P transfers to each other." Revolut, among other things, uses user identification through Diia, an government service app in Ukraine.

AIN has reached out to Revolut to comment on the situation. We will add the company's explanation when we receive it.