Ukraine's Ministry of Finance is seeking to ease legal restrictions on removing supervisory board members at state-owned banks following governance difficulties at Sense Bank.
Deputy Finance Minister Yuriy Draganchuk announced during a parliamentary temporary investigative commission hearing that Ukraine has initiated discussions with international partners to amend Article 7 of the national banking law.
The proposed legislative revision aims to grant state shareholders greater authority to dismiss board appointees under extraordinary circumstances, such as criminal prosecution.
Addressing lawmakers at the inquiry into affairs surrounding Sense Bank on September 2, 2026, Draganchuk stated that existing statutory limits on dismissals severely constrain shareholder control over state-owned financial institutions.
Under current legislation, a supervisory board member cannot automatically be removed from their position even if they are imprisoned, provided they retain internet connectivity and remain capable of performing their official duties.
Draganchuk described the legal constraints as tying the hands of the state shareholder and emphasized the necessity of broadening shareholder rights to terminate board appointments when such situations arise.
Provisions Governing Bank Dismissals
The Law on Banks and Banking Activity currently outlines two primary pathways for the early termination of a supervisory board member's authority.
Powers can end either through a formal resolution passed by the highest governing body of the institution or automatically upon specific triggering events, including voluntary resignation, death, or the introduction of temporary administration.
Outside of these automatic triggers, government officials are restricted from removing individual supervisory board members unless an official finding of non-compliance is formally established.
Such a procedure was recently executed in the case of Mykola Hladyshenko, a figure in the Forest Gump corruption investigation involving Sense Bank.
Alternatively, a dismissal process can only be initiated upon the joint demand of at least five current members of the supervisory board or an explicit request from the National Bank of Ukraine.
Members of supervisory boards at Ukrainian state-owned banks are appointed to serve three-year terms, with individuals restricted to holding office for a maximum of two consecutive terms.
Should the governing authority fail to appoint a replacement panel upon the conclusion of a three-year term, existing board members retain full statutory powers until a new board is officially constituted.
Scandal and Board Changes at Sense Bank
The call for legal reform follows recent administrative actions taken against officials linked to Sense Bank, a commercial lender operating under state ownership in Kyiv.
On August 19, 2026, the committee of the National Bank of Ukraine rendered a decision declaring supervisory board member Mykola Hladyshenko non-compliant with statutory qualification requirements regarding independence.
Following Hladyshenko's disqualification by regulators, former PrivatBank management board chairman Gerhard Boesch was appointed to the supervisory board of Sense Bank on August 31, 2026.
State Governance and Oversight
Ukraine maintains significant state ownership across its domestic banking sector, managing major financial institutions through designated supervisory boards intended to ensure independent corporate governance.
Sense Bank was brought under full state ownership to preserve financial stability, joining other major state-held lenders including PrivatBank in operating under Ministry of Finance oversight.
International financial partners and multilateral lenders regularly monitor corporate governance standards in Ukrainian state-owned banks as part of broader economic assistance programs.
The Ministry of Finance intends to continue consultations with international stakeholders to draft formal amendments expanding shareholder powers under Article 7 before submitting proposed legislation to the Verkhovna Rada.
