PrivatBank refused to service a man's accounts due to large incoming sums. Here's the court's decision on the matter.

PrivatBank sent a letter to a man notifying him of the termination of contracts and the closure of his current accounts. Significant amounts were credited to his cards, which raised suspicions. This is mentioned in the decision of the Dnipro District Court of Cherkasy, published on July 24, 2024.

The man had been a client of JSC CB "PrivatBank" for over twenty years, receiving banking services for cash management on his accounts. He did not utilize the available credit line and only used his own funds. On December 20, 2023, he received a letter from JSC CB "PrivatBank" dated December 20, 2023, informing him of the bank's decision to terminate the contracts and close the current accounts based on Article 11 of the Law of Ukraine "On Preventing and Combating the Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism, and Financing the Proliferation of Weapons of Mass Destruction," specifically due to an unacceptably high risk established during the client's risk reassessment. Given that a fee will be charged on the indicated funds, the client submitted a request to JSC CB "PrivatBank" for the transfer of funds and withdrawal of the remaining balance from his accounts.

Case Review

As a result of the analysis of financial transactions by JSC CB "PrivatBank," it was established that the man was using bank accounts/cards for operations that exhibited signs of scheming and lacked clear economic content/logical explanations. His financial transactions were deemed suspicious. The purposes and nature of the financial operations, the sources of origin, and the further use of funds were not established by the bank. According to the client's due diligence questionnaire, he indicated expected monthly deposits to his accounts ranging from 150,000 to 500,000 hryvnias, while his official total monthly income was 30,000 hryvnias. Between January 15, 2023, and December 16, 2023, a total of 487,182 hryvnias was credited to the client's card account, which is slightly over 44,000 hryvnias per month, far less than the claimed half a million hryvnias. The receipt of significant amounts on the card account was linked to the sale of personal items and valuable spare parts through the OLX.ua advertisement service.

What was the court's decision?

The court denied the claim. The bank did not prove that the client violated the requirements of current legislation or the banking limits established by the contract, which could have justified the determination of unacceptable risk in the business relationship and the termination of the banking contract.

"The court believes that the plaintiff has not proven and has not provided adequate evidence to confirm the illegality of the defendant's actions, the violation of the plaintiff's legal rights and protected interests, and the norms of current legislation. Furthermore, the plaintiff only refers to the defendant's unlawful actions regarding the cessation of business relations, but no evidence has been presented that the plaintiff was wrongfully classified as a high-risk client. The plaintiff's mere reference to violations of civil legislation is unfounded, given that the defendant is a subject of primary financial monitoring, and considering the provisions of Articles 10 and 11 of the Law of Ukraine 'On Preventing and Combating the Legalization (Laundering) of Proceeds from Crime,' financing of terrorism, and financing the proliferation of weapons of mass destruction,' and Article 64 of the Law of Ukraine 'On Banks and Banking Activities,' as special laws that explicitly grant the bank the right to unilaterally refuse business relations with clients deemed to pose unacceptable risk. Under these circumstances, it appears that the plaintiff's claims have not been substantiated, and therefore the claim should be denied," the court emphasized.