On 30 December 2010, the Ukrainian central bank regulator, the National Bank of Ukraine, revised the interest rate caps on funds borrowed by banks as subordinated debt. In particular, starting from 1 January 2011 the interest rate cap on funds borrowed in foreign currency (US Dollars) as subordinated debt, shall not be higher than LIBOR (as at the respective date) applicable to twelve-month inter-bank deposits, plus 8 percent per annum (previously it was 5 percent per annum).
As regards the interest rate caps on funds borrowed in the national Ukrainian currency (Hryvnia) or in foreign currency (Euro) as subordinated debt, these have not been changed and remain as follows:
- in Hryvnia, no higher than the discount rate of the National Bank of Ukraine, plus 2.5 percent per annum;
- in foreign currency (Euro), no higher than LIBOR (as at the respective date) applicable to twelve-month inter-bank deposits, plus 7 percent per annum.
Each interest rate cap includes the aggregate of the annual interest rate, commissions, penalties and other charges envisaged by the respective agreement.
Resolution: The Resolution of the Board of the National Bank of Ukraine "On the Determination of the Maximum Interest Rate Applicable to Funds Borrowed as Subordinated Debt", No. 592 dated 30 December 2010.
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The original publication date for this article was 22/01/2011.