The NBU licenses and supervises banks. In parallel with banking supervision, the NBU also prequalifies persons interested in acquiring insolvent banks. The NBU also delegates two representatives to the DGF's administrative board (the DGF's governing body).
After identifying problems in a bank, the NBU has the right to classify the bank as a problem bank. The DGF then begins preparations to withdraw it from the market. However, not all problem banks fail. Such banking institutions can improve their condition and, upon the NBU's decision, return to normal operations.
If the problem bank continues to violate the law, the NBU makes the decision on the institution's insolvency on its own. The NBU may invite the DGF to a meeting when the bank's insolvency is being considered, but the DGF has no voting rights in the decision.
If a bank is declared insolvent, the DGF introduces a provisional administration, i.e., removes the management and takes full control of the bank.
If it is necessary to resolve a systemically important bank, the NBU submits a proposal to the Cabinet of Ministers of Ukraine regarding the state's participation in the resolution.
After the NBU's decision on insolvency is issued, information about the bank's condition becomes public and the DGF announces an open tender. Within the framework of the tender, the bids received by the DGF from potential bidders are sent to the NBU to check the financial condition of the bidder: whether the potential buyer of 100% of the shares has sufficient own funds for the investment or whether the potential acquiring bank will be able to service the transferred deposits. Only bids from bidders that have been approved by the NBU are considered at the tender.
In the cases established by law, the NBU, which has the function of licensing, agrees to the creation of a bridge bank by the DGF and approves its charter documents. The NBU also approves the acquisition by the winning investor of 100% of the shares of an insolvent bank or a bridge bank created by the Fund on the basis of insolvent bank. After the shares are sold to the investor, the NBU approves the increase in the authorized capital of the insolvent or bridge bank, the appointment of the bank's management by the investor, and verifies that the investor has fulfilled its obligations to rehabilitate the bank.