KIEV, May 5 (Reuters) - Ukraine's largest bank has temporarily closed branches in separatist-held Donetsk and Luhansk, saying it could no longer carry out cash transactions in regions riddled with crime that could "threaten the lives" of its workers.
Pro-Russian separatists have targeted Privatbank, after its co-owner, billionaire Igor Kolomoisky, was appointed by the new government head of the nearby Dnipropetrovsk region and swiftly announced a $10,000 bounty on the heads of Russian "saboteurs".
Rebels, who say they want independence from Kiev, set fire to a branch in the town of Mariupol in the Donetsk region late on Saturday and raided a security truck last week in Horlivka, south of the region's main rebel stronghold.
"In the current circumstances we cannot and do not have the right to make people go to work in the Donetsk and Luhansk regions, where armed people break into bank branches and seize security vans in the towns," Privatbank said in a statement.
It said its clients could access their accounts via the Internet and mobile devices, use their cards in shops and make cashless transactions at self-service terminals.
"Over the last 10 days, 38 ATMs, 24 branches of Privatbank and 11 cash collection vans have suffered arson, assault and wanton destruction in the cities of Donetsk and Luhansk," it said, adding that the bank processes more than 400,000 pensions and other social benefits for 220,000 people in both regions.
Kolomoisky, Ukraine's fourth richest man, according to Forbes magazine, has become a hate figure for the pro-Russian separatists after he said he would give $10,000 to Ukrainian troops for every "saboteur" handed over.
The leader of the regional militia in Dnipropetrovsk, which borders Donetsk, also said $1,000 would be paid for a rifle, $1,500 for a machinegun and $2,000 for a grenade-launcher.
Dnipropetrovsk has been quiet since separatists started taking control of wide swathes of the Donetsk and Luhansk regions last month, in an operation blamed on Moscow by Kiev's new pro-Western leaders.
Russia, which has long considered Slavic Ukraine an extension of its own country, denies any involvement in the unrest, saying Russian speakers are simply protecting their rights from attacks by a hostile government.
(reporting by Elizabeth Piper and Natalia Zinets, editing by Nigel Stephenson)