Amendments to the law on the National Bank of Ukraine (NBU) to strengthen its institutional foundation and effectiveness, developed jointly with specialists from the International Monetary Fund (IMF), are to be adopted by the end of April, and the corresponding structural benchmark is stipulated in the EFF program promulgated by the IMF on March 12.

According to the program, the key task is transforming the NBU Board into an Executive Committee composed of the Governor and Deputy Governors. The reformed Board will be charged with formulating and implementing monetary and exchange rate policy (in line with the Monetary Policy Fundamentals approved by the NBU Council), as well as with regulating the banking system.

In addition, it is planned to strengthen the oversight mandate of the Council by charging the Council with ultimate responsibility for internal controls and risk management, and authorizing the establishment of an Audit Committee.

The document also foresees strengthening the personal autonomy of NBU Council members and Deputy Governors by enhancing appointment and dismissal procedures and taking steps to mitigate any conflicts of interest, including a new Code of Conduct.

"We will uphold NBU financial autonomy by keeping its administrative budget in line with the law on the National Bank," the Ukrainian government wrote in a letter to the IMF.

Profit distribution rules between the NBU and the government will seek a gradual build-up of general reserves to reach 4%, 7%, and 10% of monetary liabilities at the end of 2014, 2015, and 2016 respectively.

In 2015, profit distribution to the government, based on the 2014 financial operations, is expected to be at least UAH 60 billion, pending verification from the NBU's financial audit for 2014.

"We will limit the disbursement of the 2014 profit distribution, ahead of the completion of audit, to a maximum of 25% of the projected annual amount. In future years, we will not disburse any amount of the NBU profit distribution before the NBU financial audit is completed, consistent with current NBU law. To reinforce this, we will amend the Budget Code to prevent the inclusion of advance profits in annual budgets," reads the document.