Economy 2021-01-15T07:11:50+02:00
Ukrainian news
Rada Simplifies Procedures For Capitalization And Merger Of Banks

Rada Simplifies Procedures For Capitalization And Merger Of Banks

Verkhovna Rada, bank, capitalization, reorganization

The parliament has simplified the procedures for capitalization and reorganization of banks.

The relevant draft law (No. 6010) was approved by 253 votes, with only 226 votes required for its approval, Ukrainian News Agency reports.

The draft law is valid until August 1, 2020.

By this period, the period of consideration of documents is expected to have been shortened and the procedures for capitalization and reorganization of banks through mergers are expected to have been optimized.

The period of procedures involving merger of banks is expected to reduce from 1.5 to 3 months as a result of the adoption of the draft law.

The draft law is expected to regulate the issue of termination of a bank's operations without liquidating it as a legal entity.

This will allow banks that are unable to meet the regulator's capitalization requirements to leave the banking market with no burden on the Private Deposit Guarantee Fund.

The legislation currently provides no such possibility.

The draft law provides for resolving the issue of ensuring continuity of services to the customers of a bank that is merged with another bank during the period of the relevant reorganization procedure.

For this purpose, the draft law provides for reducing the period and abolishing some existing procedures during merger of banks; review of the existing procedure for interaction between banks involved in a merger, the National Bank of Ukraine, and other government agencies during the merger; determination of the moment of inheritance of the obligations of a bank that is liquidated.

As Ukrainian News Agency earlier reported, banks are required to increase their authorized capital to UAH 200 million by mid-2017.

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