Over a half of banks inspected by the National Bank of Ukraine (NBU) violate restrictions on transactions with affiliated persons.

"The regulator inspected these transactions at 58 banks as of November 1, 2016. The study showed that 27 banks carry out transactions with affiliated person observing the regulator's requirements," the NBU said.

The NBU in October 2016 tested active transactions with affiliated persons at 14 banks: the central bank seeks to finish the inspection of all banks by the end of 2016.

According to the report, 24 banks are drawing up three-year schedules for repaying loans to affiliated persons and four banks received the NBU's approval of their schedules: the regulator anticipates that in 2019 banks will operate without violating the rules.

"Many Ukrainian banks attracted deposits of the public and financed business of their owners using these funds and other persons affiliated with banks. These activities created a threat to stability of the banks and the banking system in general," the NBU said.