Recently, the President of Ukraine announced the signing of two legislative acts that would “clear” the financial sector and revitalize it. There is about the Law act No 6027-d “On Certain Legislative Acts of Ukraine Regarding Restoration of Lending (Amendment)” and the Law act No 8331-d “On Certain Legislative Acts on Improving the Functioning of the Financial Sector (Amendment)”. Changes made by legislative acts can really have a positive impact on the economy and finance. But everything is in order
Lending renewal Law act
Law No. 6027-d amends the regulation of the following questions:
- Bank secrecy disclosure
The requirement of disclosing banking secrecy of a competent body must necessarily include the surname, name and patronymic of the person the body wishes to receive the information, and the tax code too. Sn accordance with Art. 62 of the Law act “On Banks and Banking”Competent bodies are the prosecutor’s offices, the SSA, the NAB, the SBI, the National Police, the Antimonopoly Committee.
- Bail agreement
The bail agreement now may contain a reference to the deed, that set the main obligation. Also, for an agreement establishing a bail on a vehicle, now it’s enough just written form, without a notarial certificate.
The law contains nowelty about the termination of the bail agreement. Thus, the bail will have the right to recover the property of the debtor-legal entity after its liquidation, if it has been realized this right before the termination of the term – a claim or requirement is filed. Actually, the law does not define the form and content of such a requirement
- Obligation of joint debtors
The legislative act introduces amendments to the art. 543 of the Civil code, namely: the amount and terms of fulfillment of the obligation of joint debtors to the creditor does not change after the death (or liquidators, if a legal entity) of one of them. Previously, the legislation did not contain norms what regulated legal relations in the event of termination of one legal entity that was one of the debtors.
- Termination of borrow
In the case of a change in the obligation in the absence of the consent of the guarantor, resulting in an increase in the liability of the debtor, the guarantor is responsible in the amount that was before the change of obligation, if the debtor will violate the obligation. In addition, the termination of a debtor-legal entity through liquidation will not always terminate the surety. The creditor will have the right to fulfill the obligation if he had time to apply to the guarantor of the claim until the information on the liquidation is made to the U.S.D.
- Interest on loan agreements
The legislative act brings an important novelty to protect borrowers from raising the bank’s interest rate in variable rate loan agreements. In case the borrower does not agree with the increase of the rate, he will be able to terminate the agreement. In this case, he is obliged to repay for 30 days the loan within of the existing rate. Also, the provisions of the legislative act oblige the bank to indicate in the agreement the maximum possible size of the rate.
- Out-of-court settlement of a dispute regarding mortgage agreements
The legislative act establishes the provisions that must be specified in the agreement on satisfaction of the requirements of the mortgagee or in the appropriate reservation. So, it is necessary to determine the conditions under which the microcontroller will be able to use its right to extrajudicial settlement, also how to determine the cost of acquiring mortgage mortgage and how to exchange information between the parties.
Also, if earlier the settlement in the out-of-court procedure, all other requirements of the mortgagee regarding the fulfillment of the obligation were null and void, mow such requirements to the legal entity or PPE are valid, unless the contrary is indicated in the contract.
In addition, if the requirements are provided by several subjects, and the out-of-court settlement has occurred only in relation to one or several (but not all), the mortgagee has the right to claim in the part that remains unregulated.
- Electronic documents in banking services
Now, cash and settlement services can be provided on the basis of an electronic document, and the receipt of an electronic payment instrument has the right not only the client, but also his representative by power of attorney.
Law act on Improving the Functioning of the Financial Sector
This law introduces some changes in the powers of the National Bank and the creation and management of state-owned banks in Ukraine.
- National Bank
The main powers that are additionally allocated to the National Bank are:
– Storage of banknotes and coins in banks
– Carry out audits of such banks regarding the storage of cash
– Granting, renewal and withdrawal of licenses for the collection of funds
- State Banks
Now, the Cabinet of Ministers is the supreme governing body of state banks. To create a state-owned bank, it is not necessary to receive a positive conclusion of the NBU. Decisions taken by the CMU as the supreme governing body do not need to be agreed with other interested bodies. The exclusive competence of the CMU in particular includes the appointment and dismissal of members of the supervisory board, the decision to reorganize, liquidation of the state bank.
The Supervisory Board of the State Bank will consist of nine members, three of which are representatives of the government, and six – independent members. The law act establishes requirements for persons who apply to be members of the supervisory board, in particular, to prevent conflicts of interest. A commission is formed and a competition is held for selection of candidates for the supervisory board, members of which also get out of the open competition. In general, the members of the supervisory board are subject to high requirements and expectations, as evidenced by the list of their powers, as well as a list of reasons (more than 10) for their dismissal.
Conclusions
Of course, the adopted Lending renewal Law introduces positive novelties in the field of relations related to lending and credit facilities.
The norm about immutability of amount of the liability of joint debtors provides guarantees to such debtors and protects them against the possibility of abuse by other debtors – legal entities by the liquidation.
The provisions on the liability of guarantors in the initial amount is also a positive moment and protects their interests from possible abuses by debtors, since an increase in liability is possible only with their consent.
Lenders and borrowers have certain guarantees of protection of their interests. Lenders now have instruments for foreclosure in case of termination of legal entities – debtors and guarantors. This in turn should be a good incentive to increase the volume of business lending, as the debtor will not be able to reduce the amount of obligations by eliminating and possibly manipulations, Bounded with it.
Lenders are now entitled to refuse to pay interest on the loan after raising the rate and have some time to repay the loan at the rate set at the time of receiving the loan. This norm is fair enough and will enable to avoid excessive debt burden. Let’s see how the law will work in practice.
Taras Yatsyshchuk
junior associate of
corporate law and compliance practice
AL “Bachynsky and partners”
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