STATE AND DEVELOPMENT PROSPECTS FOR REGIONAL BANKING SYSTEM  OF UKRAINE UNDER MODERN CONDITIONS

doi:10.34213/ap.20.01.14

M. Kovalenko Doctor in Public Administration, Professor, Professor of Economic Policy and Finances Department, KRI NAPA, Kharkiv https://orcid.org/0000-0003-2845-6993
M. Kovalenko PhD in Technical Sciences, Associate Professor, Associate Professor of Physics and Higher Mathematics Department, Kharkiv V. Dokuchaev National Agrarian University, Kharkiv https://orcid.org/0000-0003-4793-8656

DOI: https://doi.org/10.34213/ap.20.01.14

Keywords: regional banking system, regional banks, regional development, foreign banks, banking services market, competition.

Abstract

The paper analyzes the number of banks in Ukraine from the point of view of its regions.
A conceptual framework for the regional bank and the regional banking system has been formulated. The state of the regional banking system in Ukraine is characterized. The conducted research has proved that over the recent years the regional banking system of Ukraine experienced a significant reduction and presently shows rather a low weight value of assets, liabilities and capital in the country’s overall banking system. The activity of regional banks testifies to the fact that every year they face greater challenges having to withstand price pressure from both system domestic and foreign banks which have access to cheaper sources of liquidity. It is getting increasingly harder to comply with a number of economic standards for banking activities, established by the National Bank, and the conditions of financial monitoring and compliance control. Unfortunately the National Bank of Ukraine does not take into account the importance of having a regional banking system and ensuring a balanced socio-economic development of the Ukrainian regions. Foreign experience of regional bank operation has been studied. The importance of forming regional banks as a balanced development factor for the territories of Ukraine has been substantiated. It has been shown that under the current banking system transformations, regional banks adhere to the marketing concept of development where competitive advantages are based not only on a high quality of banking services, but also on their own specificity, uniqueness and flexibility for their clients. The Ukrainian regional banks’ being engaged in provision of traditional banking products to individuals and enterprises is not their only function. More importantly, they perform an essential social function of servicing less advantaged low-income categories of clients. At the same time, regional banks contribute to solving the tasks of upgrading the operating production units and funding the creation of new ones, consequently bringing along a decrease in unemployment rate in a region, and promoting economic growth and improvement of the regional population’s living standards. Based on the research, proposals have been given as to stimulation of the regional banks’ development by public authorities.

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