18:44 21.11.2017

NBU upholds bill regulating NPL being drawn up under control of EBRD

2 min read
NBU upholds bill regulating NPL being drawn up under control of EBRD

The National Bank of Ukraine (NBU) upholds a bill on debt management being drawn up by a group of experts under the umbrella of the European Bank for Reconstruction and Development (EBRD), the central bank has said on its website.

The text of the document has not yet been published. It will be made public for discussion by the end of November. At the same time, the central bank said that the bill provides for the creation of a new category of non-bank financial institutions - debt management companies. Transparent requirements for the creation of these companies are set.

"These companies will have sufficient powers and rights to buy back from banks debts at market prices (due exclusively to the parties)," the NBU reported.

In addition, the bill defines a list of actions that the debt management company can perform with the repurchased obligations. The companies will voluntarily develop possible ways of paying off debts with the debtor, settle and restructure the debtor's obligations, including via forgiving debt, voluntarily manage the debtor's property as one of the possible ways of paying off debts.

The document also proposes temporarily, until 2023, to free all debtors - both individuals and legal entities - from paying taxes on income (profit) accrued in the case of forgiveness of ф part of their debt by a debt management company.

Debt management companies will also be able to provide related advisory services to creditors, debtors and potential investors who will have the desire to acquire a distressed asset.

The regulator said that the creation of a full-featured secondary credit market in Ukraine is hindered by the imperfection of some provisions of the law. In particular, there is no clear distinction in civil law between the assignment of the claim (cession) and factoring, and factoring itself is incorrectly used to sell non-performing loans (NPL). For the purpose of optimizing the work of creditors with distressed assets, some provisions of the legislation require revision and improvement.

AD
AD
AD
AD