National Bank of Ukraine Raises Concerns over Parliament's Voting Down of Draft Law No 2286-a
OREANDA-NEWS. The National Bank of Ukraine raises concerns over the lack of political will to back Draft Law No. 2286-а On Amendments to Certain Legal Acts of Ukraine on the Restoration of Trust Between Borrowers and Lenders. The Ukrainian MPs voted for this bill three times. In particular, only 202 MPs voted to adopt this bill as a basis, whereas 211 MPs upheld returning it to the relevant Parliament's Committee for reconsideration to get it finalized. 215 MPs voted in favor of sending the bill back to the regulator that had initiated it. However, there were not enough votes for the bill's passage.
The NBU is set to continue its attempts to push the bill on creditors' and financial services consumers' rights protection through parliament. The central bank hopes to reach a mutual understanding and maintain constructive dialogue with MPs.
The NBU has repeatedly underlined the crucial importance of laying the legal basis for ensuring the protection of creditors' legal rights. The NBU underlines that without putting in place efficient mechanisms allowing the return of funds to Ukraine’s banking system, it will be impossible for banks to resume lending to the real sector and cut borrowing costs. For this reason, the passage of the bill designed to safeguard creditors’ rights is essential for advancing financial sector reforms and achieving economic growth.
If creditors have their rights legally protected, they will be able to ease lending conditions for potential borrowers. This move will undoubtedly will help boost lending, reduce borrowing costs, thus making banking products more accessible and affordable for businesses and individuals.
Additionally, Ukraine has to stay on track with its commitments undertaken under the Memorandum of Economic and Financial Policies with the IMF, including its commitment to establish a legal framework to safeguard creditors' rights.
Twenty-six draft laws required for advancing financial sector reforms are pending approval by parliament. These include strategically important draft laws pertaining to the protection of creditors and financial services consumers' rights, financial restructuring of corporate debts, consolidation of the state regulation of financial services markets functions, as well as anti-money laundering draft laws.
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