Moldovan government approves draft meant to strengthen banking system

Chisinau, 22 June /MOLDPRES/ - The cabinet of ministers today approved a draft on the amendment and completion of the law on financial institutions and the law on registration of legal entities and private entrepreneurs, which aims at strengthening the national legal framework concerning the transparency and quality of the banking shareholders, corporate governance and risks management.      

The amendments proposed give the National Bank of Moldova (BNM) enhanced powers of supervision and control concerning the commercial banks, and the latter will be obliged to ensure a higher transparency in their work.   

Thus, the sale at the Stock Exchange of shares issued following the ones cancelled by the executive body will be made only with BNM’s permission. The issuance of the permission will be refused, if the presented information and documents contain wrong data. The persons against whom measures are to be ordered, on reasons that they failed to observe the requirements in terms of the quality of shareholders, will no longer have right to hold, directly or indirectly, new shares in the banks’ registered share capital.    

According to the planned amendments, BNM will have right to establish special management, in case it ascertains a concerted action of shareholders, who are holding a substantial higher quota than 50 per cent of the bank’s registered share capital without the written permission of the National Bank. BNM will be able to make an early intervention in the formation of the banking shareholders, but not following the completion of the action.  

The draft’s authors also propose completion of the law on financial institutions with provisions due to give BNM right to carry out the banks’ audit “on other purposes than those presently provided for in the law on financial institutions,” At present, the Central Bank can carry out controls in banks only once a year.

The deadline of the process of liquidation of banks is proposed to be extended from 3 to 5 years, with its prolongation by two more years instead of one. Presently, the banks’ liquidators are facing impossibility to finalize the process of banks’ liquidation in the term set by the legislation, as the sale of assets is difficult and lasts. The process of recovery of debts at the expense of debtors that are in insolvency is difficult too.   

On 1 February 2016, 11 banks were under liquidation, with the licences of some of them withdrawn many years ago. Data put out by liquidators shows that these banks have significant debts to private persons, banks, legal entities, including state institutions, which amount to 2.27 billion lei, of which 585.9 million lei to private people. The extension of the term of liquidation will lead to enhancing of depositors’ chances to recover the debts, BNM said.  

The draft on the amendment and completion of legislative acts on the banking activity will be submitted to parliament for consideration.  

(Reporter V. Bercu, editor A. Raileanu)