Parliament scraps flaws in moratorium law over property used as currency-pegged credit collateral
The Ukrainian parliament has passed draft law No. 1610 on a moratorium on the eviction of Ukrainian citizens from their property which was used as collateral for foreign currency credit, which will prevent notaries from issuing documents pertaining to eviction.
An Interfax-Ukraine correspondent has reported that 290 lawmakers supported the bill.
Head of the finance parliamentary committee, Serhiy Rybalka, said that the scheme was a flaw in the moratorium law passed by parliament on June 3, 2014, and that banks had begun to actively exploit the flaw.
"This is a temporary moratorium – it is in effect until the currency-pegged credits are restructured," he said.
Lawmaker Leonid Yemets proposed that the moratorium be expanded to borrowers who took mortgage credits in hryvnias, however parliament did not support his initiative.
The National Bank of Ukraine stated last week that the central bank has agreed on a memorandum restructuring consumer credits pegged to foreign currency with banks and coordinators of the foreign currency borrowers, with the participation of an International Monetary Fund (IMF) representative.
The memo envisages that currency-pegged credit debts not exceeding UAH 2.5 million in equivalent to the NBU exchange rate as of January 1, 2014 (7.993/$1) will be recalculated to hryvnias at the exchange rate set on the day of restructuring. However, if the borrower pays the restructured credit on time, the sum will be cut to the equivalent sum calculated using an exchange rate of UAH 7.993/$1.
The memo states that the credit rate for the credits recalculated under the exchange rate of UAH 7.993/$1 will be fixed at a level no higher than the rate stated in the credit agreement for a period of three years, from the commencement of credit restructuring. Banks will set fines on credits eligible to be written off when the credit is restructured.
"The memo is to take effect from the moment the law on amendments to the Tax Code, regarding banks and individuals who took consumer credits in foreign currency, is in force," the central bank said.