Rada OKs restructuring of business debts to banks

Thursday, March 31, 2016 - 17:20 (EEST) Section: Latest news

The Verkhovna Rada of Ukraine has adopted in the first reading a draft law ”On financial restructuring,” which regulates the procedure for restructuring debts of operating businesses to the banks, an UNIAN correspondent reported.
Deputy Finance Minister of Ukraine Artem Shevalyov noted that the document has been prepared with a view of helping overcome consequences of the crisis in Ukraine, and it is expected to contribute to an economic growth in the country through the mechanisms of voluntary peaceful settlement of bad debts that operating businesses owe to the banks.
In turn, Deputy Chairman of the Parliamentary Committee on Financial Policy and Banking, Ruslan Demchak, said the Committee recommends that the parliament adopt the draft law as a basis and set up an ad hoc group, which would comprise representatives of the Finance Ministry, the Ministry of Justice, and banking associations, tasked with updating the draft before the second reading.
”Implementation of provisions of the draft law will have an unquestionable social and economic impact, as it will help keep jobs and create new ones. Businesses facing a difficult economic situation will see a positive outcome of such initiative. The approach that is set forth in the bill would allow companies with an efficient and potentially successful business model, to remain solvent, avoid bankruptcy and return to a growth path,” the MP said.
Earlier, the National Bank of Ukraine said it was also in favor of the bill ”On the financial restructuring,” noting that the adoption of the document would allow Ukraine to fulfill its commitments under the memorandum [of cooperation] with the International Monetary Fund.
According to experts` estimates, corporate debts that would fall within the scope of the proposed mechanism may total UAH 200 billion.
As UaPosition reported earlier, in November 2015, the Ukrainian government approved a package of bills to support foreign currency loans of citizens and businesses, including draft laws ”On financial restructuring” and ”On restructuring the Ukrainian citizens` liabilities under FX loans extended for purchasing the single residence (mortgage loans).”