The National Bank of Ukraine has told Revolut that it must obtain the necessary licences to conduct banking operations in the country, following a recent expansion of the firm’s activity.
Revolut announced in early February that it was expanding its European services to Ukraine, including instant peer-to-peer payments, foreign exchange services and virtual and physical cards.
The London-based fintech carried out the expansion via its Revolut Bank UAB division, which is based in Lithuania and provides financial services under a European Union (EU) licence.
Ukrainian banking laws, however, require firms providing banking services in the country to either establish a local branch or obtain a licence – with both requiring the NBU’s authorisation.
“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 stated.
“The National Bank of Ukraine is also bringing it to the Ukrainian people’s attention that Ukrainian legislation on consumer protection in financial services and on the deposit guarantee system does not apply to Revolut customers.”
The central bank added that it “will act within its statutory prudential mandate, take every measure necessary to ensure the stability of the Ukrainian banking system, respond to violations of the law, and protect the interests of bank depositors and customers”.
The development is a slight bump in the road for Revolut, which had identified ‘soaring’ interest in its services in the Central and Eastern Europe (CEE) region. Though the country has been facing full-scale Russian invasion for the past three years, Ukraine remains a key market in this region.
Additionally, the Ukrainian government has been keen to see overseas firms continue to make a contribution to the country’s economy at a critical juncture in its history – though as the NBU states, these firms must have the correct paperwork in place.
Overall though, a stall in Ukraine will probably not be too much of a headache for Revolut. The company has had difficulties securing licences in the past, such as one in its home market of the UK, but has eventually been able to clear these hurdles.
Revolut also stands out as Europe’s most valuable fintech and is set to publish its financial results for 2024 soon with a huge profit margin expected.
In a statement seen by Payment Expert, Revolut responded to the National Bank’s announcement: “Revolut prioritises compliance with local regulations and conducted a thorough evaluation before offering services to Ukrainian residents on a cross-border basis.
“Revolut is currently providing services to Ukrainian residents through Revolut Bank UAB, based in Lithuania and supervised by the European Central Bank and the Bank of Lithuania. We offer EU accounts only and we are not planning to open Ukrainian accounts without further authorisation.
“Revolut is providing services to hundreds of thousands Ukrainian customers in the European Union and beyond. We offer instant fee-free payments between Revolut users that connect Ukrainian families around the world.
“We have previously notified the Ukrainian regulator about our plans in Ukraine and we will seek a local licence in due course, and will work closely with the NBU to bring even more innovative financial services to Ukrainians.”
