The parliament of Ukraine Verkhovna Rada has passed a new law that will enable the state-run banks to appoint independent members to their supervisory boards, reported Reuters.
The new law, which aims to make the domestic state-run lenders more independent, is a part of the financial restructuring commitment made to International Monetary Fund (IMF).
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Since 2015, IMF has assisted Ukraine to rehabilitate and stabilise its war-torn economy with a $17.5bn relief package.
As a part of the commitment, Ukraine is required to revamp its banking sector where non-performing loans touch 60% of all state lenders’ overall portfolio.
Head of a parliament committee on banking Mykhailo Dovbenko was quoted by the news agency as saying: “We currently do not have effective control under hundreds of billions of hryvnias that we send from the state budget in order to support state-owned banks. We have to bring order here and the law will help.”
As a part of the restructuring programme, the government has closed two-thirds of the lenders and nationalised PrivatBank, the largest lender in the country, in 2016.
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By GlobalDataLast month, the Ukraine’s Ministry of Finance approved the development strategy of PrivatBank till 2022.
The plan includes introduction of an effective risk management system, reducing non-performing loans, and multiple organisational changes to streamline operational efficiency.
