Ukraine's national state enterprise of postal service Ukrposhta has stopped servicing cash utility payments to the accounts of the Kyiv municipal enterprise DIVT, saying it is unprofitable, the company said on its website on 11 January.
Kyiv's residents pay their utility bills to DIVT's accounts.
In the second half of 2016, Ukrposhta reviewed its contract with DIVT to find out that it was loss-making, as the service fees did not cover the processing costs. Ukrposhta has asked DIVT to increase the fee to no avail.
The contract between the companies expired on 31 December and Ukrposhta said it decided not to renew it unless the city of Kyiv agrees to increase the fee.
Meanwhile, Kyiv residents are offered to pay their bills using commercial banks and electronic payment services.
Last November, the state-owned bank Oshchadbank, which processes up to 50 per cent of all housing and utility bills, attempted to start charging the processing of utility bills. President Petro Poroshenko criticized this initiative.
Currently, Ukrainian legislation bans banks from charging fees for banking services below transaction costs. However, Oshchadbank keeps processing utility payments at a loss.