Deputies supported the “anti-crisis” bill
Verkhovna Rada softened requirements for minimum capital of banks from 500 to 200 million dollars, supporting draft legislation Number 3229-D. The new bill amends the tax code and other laws of Ukraine to provide additional assistance to taxpayers for the duration of quarantine activities related to the COVID-19 epidemic.
By law, the National Bank received the right to establish for individual banks and legal entities that intend to carry out banking activities, a differentiated minimum authorized capital – not less than 200 million UAH.
National Bank of Ukraine
After the adoption of the bill, the National Bank will make appropriate amendments to regulatory legal acts.
As noted by the first deputy chairman of the NBU, Ekaterina Rozhkova, the bill is “another step toward banks in times of crisis.” He recalled that earlier the National Bank had deferred the requirement of banks to comply with the stock buffer (preservation) of capital and buffer of systemic importance.
Parliament also extended the law “on simplifying the processes of restructuring and capitalization of banks” from August 1, 2020 to August 1, 2024. This law allows banks to:
- Perform the reorganization by merging according to a simplified process, with an average tenure of three to four months (four banks have already used this mechanism).
- Implement a simplified capitalization process, which can be done in a very short period of time (15 banks have already used this mechanism).
- Stop banking on your own initiative without liquidating a legal entity (7 banks used this process).
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According to the National Bank of Ukraine, in January-March this year, net hryvnia trade credit grew by 3.6%. In particular, in March – about 9%. Hryvnia loans increased due to seasonal and business willingness to reduce obligations on foreign currency loans against the backdrop of expectations of devaluation. In general, foreign currency debt decreased by about 7% in the quarter, partly due to conversion to hryvnia. The National Bank noted a decrease in demand for consumer loans. In the first quarter, the growth rate of loans slowed in the population, with a decrease in demand from borrowers and increased risk for lenders against the backdrop of quarantine measures, and interest rates at around 34%.
Read: Parliament adopted a law on banks: what does it mean?