Transfers “kicked off”: Receiving financial institutions have initiated the freezing of money from accounts shut down by force.
Banks are denying transactions from Ukrainians failing to clear fiscal oversight checks, leaving individuals impoverished.
Monetary establishments have started restricting Ukrainians from obtaining funds after their accounts were compulsorily terminated due to fiscal governance procedures. Consequently, citizens are unable to access their assets and are cornered by circumstances, forfeiting command over their finances.
A standard scenario that is progressively becoming commonplace: a person is blamed for contravening fiscal surveillance rules, yet the stipulations themselves remain ambiguous, and patrons frequently lack comprehension of them. The account is then terminated without consent, and the customer is provided with a constrained selection of three alternatives: donate the capital to philanthropy (to a dedicated account at the National Bank), obtain a fractional sum in physical currency, or transmit the capital to an account at a different bank.
Numerous banks, backed by the NBU, decline to permit cash withdrawals from accounts in these instances (or permit only complete withdrawals), in spite of individuals possessing the legal entitlement to do so. Therefore, Ukrainians are compelled to consent to an electronic transfer to an alternate bank, in anticipation that their assets will not be subjected to further freezes there. Regrettably, such transfers are currently failing to reach the designated recipient.
The rationale is that receiving banks (where the individual maintains another account) have put in place their own limitations. Should the rationale for payment denote that the funds originate from forcibly closed accounts, they abstain from crediting them to the individual customer’s account.
Fundamentally, such transfers are being “bounced” much like a ball. The funds do not get to the recipient, and following this “bounce,” they are sent back to the originator bank. Nevertheless, given that the account belonging to the financial monitoring transgressor is already inactive, the resources fail to connect with the client, but remain suspended in the originating bank’s temporary holding account.
“Capital can linger in this holding account for a substantial duration, in conjunction with other unspecified money or contracted money undergoing diverse levels of verification (often pertaining to foreign exchange contracts), awaiting necessary documentation. This represents a provisional preservation account and isn’t conceived for active transactions. Because of heightened financial control regulations, the aggregate amount of assets within holding accounts has lately escalated noticeably across multiple banking institutions,” one bank elaborated.
An individual whose transfer is turned down and whose account is blocked discovers themselves in an impasse – stuck in limbo, lacking access to their money.
Their option is circumscribed:
1. Accept the forfeiture of funds, essentially surrendering them to the bank.
2. Resort to litigation and challenge the bank’s judgment to freeze and forcibly shut down the account, insisting upon a reimbursement in cash.
3. Persist in attempting electronic transfers to supplementary banks until discovering one that validates the payment. This will necessitate opening accounts at fresh receiving financial institutions.
“Impeding incoming capital subsequent to a mandated account closure constitutes a comparatively nascent occurrence. Nobody can furnish an absolute compilation of banks that display leniency with such transfers versus those that decline them upon observing details concerning fiscal surveillance infringements within the payment specifics. It resembles a game of chance. Should you possess fortune, the transfer will bypass rejection, but will be attributed to the account. Yet, even within this scenario, it's advisable to withdraw hard currency from an ATM forthwith, as the receiving bank retains the potential to impede the individual’s account at any juncture. It parallels tales of espionage: the instant is missed, and utilization is precarious. You are obliged to commence afresh at the novel bank,” advised the treasury director of a leading bank.
Impeding incoming capital that has not fulfilled fiscal oversight hasn’t yet evolved into a ubiquitous phenomenon. Nonetheless, banks anticipate the swift proliferation of this practice, pointing to the escalation of financial monitoring edicts influenced by the National Bank, which shall manifest particularly conspicuously during 2025.
