Bill No. 3329-2 that foresees a reduction in Ukrainian banks’ minimum charter capital from UAH 500 million ($18.5 million) to UAH 200 million ($7.4 million) has passed its first reading.
The bill amends the Tax Code of Ukraine and other laws to additionally support taxpayers during the quarantine period set to combat the spread of the novel COVID-19 coronavirus. The draft law was backed by 336 MPs with at least 226 votes required. The move is needed to bring the legislative requirements to the minimum size of the operating banks’ charter capital in line with today’s economic realities.
“Considering the situation in Ukraine’s banking system, as well as the current state of the economy during the challenging epidemiological situation that has developed locally and globally, we believe that reducing the requirements for the minimum size of the operating banks’ charter capital will have a stabilizing effect,” the explanatory note to the draft law said.
It says that by the end of 2020, the issue will have been most relevant with regard to 35 small-sized banks (out of 76 financial institutions), mainly with Ukrainian capital, which will not be able to accumulate the needed funds and carry out additional capitalization amid financial crisis and quarantine restrictions. (UNIAN/Business World Magazine)
