When deciding to terminate a contract with an individual client, financial institutions may resort to automatic withdrawal of the loan amount from the client’s account. Focus find out if banks are entitled to this and why they might decide to terminate their business relationship altogether.
Termination of contracts at the initiative of the bank and the right to take such a step are regulated by the Civil Code of Ukraine. And based on article 1075 of the Civil Code The bank may close the customer’s account if there is no transaction in the customer’s account for three consecutive years and there is no cash balance in this account.Also, whether there are justifications specified in the Law “On Preventing and Combating Laundering Proceeds of Crime, Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction”. In this respect Focus said Natalia Buta, chief accountant of law firm GLS.
According to him, the moment of unilateral termination of the contract:
- the day after the expiry of the term stipulated in the contract, after the customer receives the notice of termination of the contract;
- the moment the bank receives a response to its notice of termination of the contract;
- the date on which the court’s decision to terminate the contract enters into force.
According to Natalia Buta, in case of termination of the contract at the initiative of the bank, the balance of funds in the client’s account is returned to the client. As for the loans, the expert explained that everything here depends on the parameters of the contract.
“The bank has the right to withdraw money from the account to repay the loan, only if the customer has agreed to this and this is provided for in the terms of the contract.“, – says Natalia Buta.
Important
Previously Focus He wrote that the Central Bank allows non-banking financial institutions to withdraw any amount of foreign currency from their bank accounts. In this way, the NBU hopes to expand the supply of foreign currency notes without fraying and stabilize the situation with cash exchange.
Recall that in connection with the entry into force of law 3048-IX, the possibility of using funds on detained accounts has changed. If Previously, during martial law, customers whose debt in enforcement proceedings did not exceed 100,000 UAH had the opportunity to freely throw their money into the arrested accounts, now borrowing from a current account costs only two minimum wages (13.4 thousand . UAH) in a month.
Source: Focus
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