Payment cannot be made. Does a bank have the right to refuse service to citizens?

Living in Kiev, Vladislav visited the nearest branch of a large Ukrainian bank to perform a very simple service – to pay about 5 thousand hryvnias into the company’s account. However, the bank manager said that the transfer through the cash register was impossible, since Vladislav did not have an open card account in the bank. “This was very surprising, because before I was paying at the cash desks of different banks and was never refused. This time I was offered to give a payment card and then carry out the transaction I needed,” said Vladislav. Focus He turned to experts to investigate why banks were refusing services and whether they had the legal right to refuse services to customers at all.

They damage their reputation: How do banks explain refusals to transact?

Dmitry Zamotaev, director of the retail sales department of Globus Bank, says: The legislation does not provide grounds for restricting the rights of customers, and rejection “stories” damage the reputation of both the bank in which this happened and the entire banking system of the country.

“I will say more: no internal instructions provide for such restrictions, even if employees of individual departments resort to them. Of course, it cannot be excluded that some financial institutions have, so to speak, “secret” protocols, but I repeat; they violate the rights of citizens,” says Dmitry Zamotaev.

According to that, Banks can impose such artificial barriers to expand their customer base . “But such an increase will be only nominal for reporting purposes. Those who are forced will, in any case, not be customers of this bank,” says the expert.

Evgeniy Dubogryz, associate expert at CASE Ukraine, is also confident: Banks do not have any legal basis to force citizens to issue cards and can only carry out the necessary banking transactions under these conditions.. “According to the law, anyone who benefits from any kind of bank service is a customer of the bank, but there is no obligation to open an account, there is even a concept called “customer without opening an account”. The most common KPIs for bank managers and executives are the number of accounts and often maps,” Evgeniy Dubogryz said in a comment. Focus.

Finmon does not sleep: when banks have the right not to trade

OTP Bank says: Banks have no legal basis to request the issuance of a card to pay more at the cash register. However, bank experts explain that this may be possible if there is doubt about the operation carried out or customer identification and verification requirements are met.

“The bank has the right to refuse on the basis of internal documents, where the rules are determined by the bank in accordance with financial monitoring legislation. Is this related to financial tracking or specific identity requirements? This is because the bank complies with legal requirements in the field of financial monitoring, including requirements for identification and verification of customers. According to the law, a customer is any person who applies to provide services to the primary subject of financial monitoring,” says OTP Bank.

Experts emphasize that: the bank’s right to refuse to make a transfer or payment if such refusal is made in accordance with applicable legislation, with Article 15 of the Law of Ukraine “On preventing and combating the legalization (laundering) of proceeds of crime, the financing of terrorism and the proliferation of weapons of mass destruction”.

This article of the law states that the bank that is the subject of primary financial monitoring is obliged to refuse to establish (maintain) business relations/open an account (service) to the customer, including to terminate business relations, close a customer account. Refusal to open an account/make financial transactions in the following cases:

• If it is not possible to establish data that allows the identification and/or verification of the identity of the customer as well as the identification of the ultimate beneficial owners, or if the person who is the subject of primary financial monitoring has suspicions that the person is acting on his or her behalf;
• an unacceptably high risk to the customer arises or the customer fails to provide documentation or information necessary for proper verification of the customer;
• providing unreliable information by the client or its representative to the primary financial monitoring subject or providing information with the intent to mislead the primary financial monitoring subject;
• Determining that the bank or other financial institution with which correspondent relations have been established is a front bank and/or maintains correspondent relations with the shell bank, as determined by the relevant state financial supervision;
• If it is not possible to identify the person on whose behalf or whose interests a financial transaction is carried out and to determine the ultimate beneficial owner or beneficiary (beneficiary) of the financial transaction.

The law also states that the bank has the right to refuse to carry out a suspicious financial transaction.

Complaint to the NBU or court: how to act if an illegal bank refuses to pay

Dmitry Zamotaev is convinced: a citizen has the right to carry out a bank-regulated operation (transfer of funds, utility or other payment, etc.) in any branch of any bank. “There is a right to sue if there are any restrictions. And of course the more publicity there is, the fewer such lawsuits there will be.”“, says the expert.

According to Evgeny Dubogryz, Citizens must report cases of rejection and imposition of the card to the National Bank. But not only the NBU.

“According to the recommendations of the NBU, citizens must first inform the bank management; If there is no response, contact NBU. So, an additional step is an appeal to management, preferably documented in some way. Most of those who are dissatisfied at this stage do not want to do this because it takes a long time and it is not clear how to communicate and how to document. And without this the NBU will not be able to react. That is why social networks continue to exist,” summarized Evgeniy Dubogryz.