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Economy 2018-09-15T05:29:42+03:00
Ukrainian news
Rada Adopts Draft Law On Return Of Funds To Defrauded Depositors

Rada Adopts Draft Law On Return Of Funds To Defrauded Depositors

The parliament has adopted a draft law on return of funds to defrauded depositors, which was proposed by President Petro Poroshenko.

The draft law (No. 5390) was approved by 285 votes; only 226 votes were required for its approval, Ukrainian News reports.

The draft law stipulates that funds that a non-bank financial institution attracts from the population as loans or deposits through a bank that is authorized under the relevant agreement should be equated to deposits.

Refund of such funds will be guaranteed if the authorized bank has been declared insolvent as of the date of introduction of this law into force.

Employees of the Mykhailivskyi bank concluded loan agreements with the bank's clients during the period of 2014-2016.

These loans were obtained on behalf of two financial companies - LLC Investment and Settlement Center and LLC Credit Investment Center - rather than the Mykhailivskyi bank.

After the Mykhailivskyi bank was declared insolvent, the Private Deposit Guarantee Fund refused to guarantee the deposits of 15,000 people who placed their money this way.

The draft law will allow return the funds of the bank's customers, which total about UAH 1.2 billion.

The draft law also provides for instructing the Private Deposit Guarantee Fund to carefully examine documents relating to every natural person equated to a depositor and begin paying refunds no later than 20 working days from the date of introduction of this law into force.

It grants the Private Deposit Guarantee Fund the right to file claims against the non-bank financial institutions that attracted funds from the public.

Funds recovered from such non-bank financial institutions will be included in the liquidation fund of the corresponding bank.

The draft law bans financial institutions from attracting funds of individuals with a commitment to return the funds, including through loans, if the law on the operations of the relevant financial institutions does not expressly provide for such.

As Ukrainian News earlier reported, the interagency working group that was set up to address the problems of the Mykhailivskyi bank's depositors is considering four options for refunding depositors.