The National Bank of Ukraine (NBU) welcomes the approval of Draft Law No. 6027-д On Amendments to Certain Legal Acts of Ukraine on Resumption of Lending by the Verkhovna Rada of Ukraine in the second reading and as a whole. Today, 239 MPs voted in favor of the draft law that was among the priorities of the NBU and the government for 2018.
According to the NBU, the full-scale resumption of lending is blocked by a number of gaps in the applicable law of Ukraine that hold back the performance of Ukrainian banking sector. The gaps include, inter alia, surety procedures that do not work in practice and are a formality, complex and risky mechanism for determining the variable interest rate, shortcomings in out-of-court instruments, and a set of provisions that entail the risks of collateral withdrawal despite obligations under a loan agreement.
Approval of Draft Law No. 6027-д will resolve issues that cause systemic hurdles for lending resumption in the domestic economy and generate additional risks for domestic and foreign investors. Once the creditors’ rights are protected, banks can loosen requirements to potential borrowers. This will fuel an active use of lending as a financial instrument, reduce the cost of credit resources, and respectively improve accessibility of banking products for business entities and individuals.