Preparation for resolution begins in advance, when a bank is classified by the NBU as a problem bank. A bank's stay in problem status can last up to 180 days and can end either positively, when the bank resolves its problems and returns to normal operations, or negatively, when the bank is declared insolvent. In some cases, the bank may lose and regain the status again. In other cases, for example, in the event of an extreme liquidity shortage, the NBU's decision on insolvency may be taken much more quickly, even within a few days. Some banks become insolvent even without acquiring problematic status.
During the preparation for the procedure for withdrawing a bank from the market, the legislation allows the Fund to disclose banking secrecy exclusively to pre-qualified persons . The list of persons pre-qualified by the National Bank is posted at the link .
After the bank is declared insolvent, the Fund shall introduce a provisional administration in the bank and announce an open tender . As part of the open tender, the DGF shall compare the net costs in case of accepting each of bids received with the costs of liquidating the insolvent bank. The lower the DGF's costs of resolution, the higher the amount will be allocated to repay deposits and other liabilities of the insolvent bank. The winner of the tender is the investor or bank whose bid corresponds to the lowest costs.
If there is a winner of the open tender or in case of government involvement in the resolution, the DGF implements one of the resolution methods that the winner of the open tender proposed. If there is no winner of the open tender, the only possible way to remove a bank from the market is usually its liquidation with the DGF paying guaranteed compensation to depositors.