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NBU bans cash payments over 50,000 hryvnyas

The limit for individuals was reduced three times.

NBU bans cash payments over 50,000 hryvnyas
Photo: Photo: depositphotos.com\a-taiga

The National Bank of Ukraine on 4 January lowered the threshold amount of cash settlements by individuals from 150,000 to 50,000 hryvnyas, the central bank said in a statement.

The maximum amount of cash settlements between an individual and a company (entrepreneur) during one day was set at 50,000 hryvnyas. The same limit will apply to settlements between individuals within the purchase and sale contracts that are subject to notarization.

Individuals have the right to carry out settlements on the amounts that exceed 50,000 hryvnyas, by transferring funds from one current account to another, payment and/or transfer of funds to the current account (including the deposit of a notary to a separate current account in local currency).

Cashless payments can be carried out without any restrictions, and banks are obliged to provide cashless transfers at the request of customers in full.

At the same time, the maximum size of cash settlements by companies (businesses) between them in a single day remains unchanged at 10,000 hryvnyas.

The NBU notes that the establishment of the ceiling amount of cash payments at the level of 50,000 hryvnyas will not cause inconvenience to citizens and will not affect the daily shopping of population, because they will only apply to large purchases (real estate, jewellery, vehicles, art, furs, expensive watches, travels, etc).

"The decision of the National Bank of Ukraine on this issue is fully consistent with international experience as many European countries (France, Belgium, Portugal, Italy, Spain, Greece) have set limits amount of cash payments, while other countries are also planning to introduce similar rules," said the regulator.

Fiscal authorities of Ukraine will carry out the monitoring over the compliance with the rules of cash payments for goods (services) in accordance with the Tax Code of Ukraine.

According to the NBU, the establishment of the ceiling amount of cash settlements with the participation of individuals at the level of 50,000 hryvnyas is aimed to contribute to:

• ensure stable cash receipts into the banking system and accelerate their processing;

• narrowing the scope of the use of cash and accelerate the development of non-cash segment.

The Comprehensive program for the development of the financial sector in Ukraine until 2020, provides for a gradual reduction in the level of cash turnover in the economy (the ratio of M0 to GDP) in 2020 down to 12 per cent (in 2014 this figure was at 18.1 per cent, and fell to 14.6 per cent in 2015).

The NBU has limited the size of allowable cash settlements sum down to 150,000 hryvnyas from 1 September 2013.