The National Bank of Ukraine has simplified the registration procedure for agreements on granting FX loans to resident borrowers by nonresidents. This move by the regulator aims to streamline the requirements to operations involving raising external financing by residents.
First, the regulator has simplified the registration procedures in case of replacement of a resident creditor with a nonresident creditor under the loan agreement. Specifically, the NBU has expanded the list of parties to the loan agreement that are entitled to apply to banks to initiate the respective registration procedures. From now on, registration will be initiated or changes to these agreements will be made upon the request of a resident borrower, nonresident creditor and the authorized bank of the initial creditor. In particular:
- upon the request of a nonresident creditor in case of replacement of a nonresident creditor with another nonresident; and
- upon the request of the authorized bank in case of replacement of a creditor (authorized bank) with a new nonresident creditor.
Up until now, only borrowers were authorized to initiate registration and make changes to the registration of loan agreements. The decision to authorize creditors to apply to banks to initiate registration procedures will make it possible to extend the rights of creditors and encourage foreign creditors to participate in loan projects implemented in Ukraine.
Second, the regulator has introduced a new automated registration system for agreements on granting FX loans to resident borrowers by nonresidents. The new system, inter alia, is intended to:
- allow the NBU to carry out registration of agreements upon the request of applicants by automatically making entries into the electronic register based on the information regarding the agreement submitted by the authorized bank;
- provide authorized banks with access to the electronic register and authorize these banks to notify resident borrowers of the registration;
- require authorized banks to oversee compliance with the regulatory requirements, in particular with regard to the highest interest rate, when performing operations under the loan agreement;
- authorize the NBU Financial Monitoring Department to carry out a preliminary review and verify transactions that fit the description of risky operations (if no threats are detected, the department will forward the agreement for registration automatically); and
- revised the list of grounds for cancelling registration. From now on, the NBU shall not cancel the registration of the agreement if the regulator does not receive statistical information on these operations within 90 days.
Third, the NBU has repealed a requirement for resident borrowers to submit a certificate indicating the actual loan amount and amounts repaid under the loan agreement. Up until now, resident borrowers were required to submit this certificate to the authorized bank if they deposited the borrowed funds in foreign currency on accounts abroad.
The amendments to this effect are provided for by NBU Board Resolution No. 26 of 23 March 2017 On Amendments to Some NBU Regulations. The aforementioned amendments shall take effect from 25 March 2017.