This is what was underlined by Director of the NBU Banking Supervision Department Kateryna Rozhkova during the round-table discussion focused on exploring ways to find a legal solution to the problems faced by FX borrowers, which was held on August 28, 2015.
“The National Bank of Ukraine strives to find a speedy solution to the problems faced by Ukrainian FX borrowers, pushing for the real mechanisms to protect and support these persons, which would primarily target the most vulnerable. As earlier, we call for the need to find a solution to the problem on a voluntary basis, on terms acceptable for banks and borrowers. At the same time, we welcome the consensus reached by the banks in the process of drafting a bill which merged the mechanisms for restructuring consumer loans in foreign currency proposed by the existing memorandums,” said Kateryna Rozhkova.
According to Kateryna Rozhkova, today banks have taken an active stance in efforts to address the problems faced by the individuals who have borrowed in foreign currency. Overall, the restructuring process has shown positive developments as the amount and value of consumer loans in foreign currency have been steadily decreasing in banks' loan books. As of January 1, 2015, foreign currency denominated
mortgage loans amounted to 73.5 thousand and totaled USD 3.6 billion. As of August 1, 2015, the amount of FX mortgages (55.7 thousand) stood at USD 2.4 billion.
However, the banks stressed that the borrowers willing to restructure their debt liabilities in foreign currency had been the least active in the negotiating process at the time when a draft law No. 1558-1 providing for the non-market and populist terms of FX loan restructuring was being considered and passed by the Verkhovna Rada of Ukraine. Therefore, the sound and prudent policy to tackle this sensitive problem is needed as never before.
The substance of the draft law developed through a negotiation process between borrowers and banks was also presented during the round-table discussion. The proposals put forward by the banks and borrowers were merged into a single document by the Independent Association of the Banks of Ukraine (the IABU). At the suggestion of the National bank of Ukraine, the wording of the draft law will be finalized jointly by the banking community and the public. Therefore, leaving open the possibility and not limiting the rights of banks and their customers to determine the terms of FX loan restructuring through a negotiation process, the future draft law will establish the clear and transparent terms for resolving this problem.
As Executive Director of the IABU Olena Korobkova said, the draft law would apply solely to FX mortgage loans granted to borrowers (individuals) to purchase a single housing unit. Certain categories of borrowers being Ukrainian citizens (those who have served in the ATO, large families and first group disabled people) will be offered more preferential terms of FX loan restructuring than other borrowers.
“The draft law is intended to unify the approaches that banks apply in their loan restructuring programs. The draft law presented today fully covers the most vulnerable, which is very important as these memorandums do not apply to the largest portion of loans. First, these are the loans that have been assigned to factoring companies. Second, these are the loans in the banks that have been wound up or placed under receivership. The restructuring process is out of the question in these banks. As to the International Monetary Fund, it sticks to its stance: all the issues related to the contractual relations between banks and borrowers should be settled through a voluntary negotiation process between borrowers and banks. As it is the banks that have initiated the draft law, by doing so, they have expressed their willingness to resolve the problem of foreign currency denominated mortgage loans in such a manner. Building on this approach, the National Bank of Ukraine is prepared hold negotiations with the IMF over the need to adopt this draft law," underlined Director of the NBU Banking Supervision Department Kateryna Rozhkova.
The event has been arranged by the Independent Association of the Banks of Ukraine. The CEOs of Ukrainian banks, including Raiffeisen Bank Aval, UKRSOTSBANK, PRAVEX-BANK, UkrSibbank, Ukreximbank, PRIVATBANK, Piraeus Bank, Alfa-Bank and the representatives of the Public Council under the National Bank of Ukraine have participated in the round-table discussion.