Today, MPs failed to support in the first reading Draft Law No. 7180 On Amendments to Some Legal Acts of Ukraine Regarding Specifics of State-Owned Banks Governance. Only 187 MPs voted ‘for’ the draft law. Thus, the document was thrown out.
The NBU stresses that supporting state-owned banks governance is of strategic importance for further implementation of the financial sector reform.
Adoption of Draft Law No. 7180 would enable a fundamental review of principles and mechanisms of corporate governance of state-owned banks. “The draft law details improvement of principles and mechanisms of corporate governance of state-owned banks and is designed to bring these principles in line with the best international standards. This would greatly foster the competitiveness and effectiveness of the state-owned banks,” noted Director of the NBU Licensing Department Oleksandr Bevz.
The regulator has repeatedly highlighted and continues to note that state-owned banks require the introduction of high standards of corporate governance.
The NBU expects that the state-owned bank governance will be updated from the legislative point based on understandability, equality and fairness.
Furthermore, the rejected draft law prescribed the creation of the state-owned banks governance system free from political impact due to supervisory boards that would be mostly composed of independent members.
The draft clearly prescribes criteria of independence for the supervisory board members that would be competitively selected according to the procedure set out by the Cabinet of Ministers of Ukraine only from a number of applicants selected by open competition by the recruiting company.
Moreover, the draft law was expected to introduce criminal liability for unlawful intervention in operations of state-owned banks.