Law on NBU's loan register becomes effective on March 4
The law amending some Ukrainian laws regarding the creation and keeping the loan register of the National Bank of Ukraine (NBU) and improving the management of loan risks of banks published in the Holos Ukrainy parliament's newspaper became effective on March 4 and will be applicable in two months except for certain provisions.
As reported, the bill was passed by parliament on February 6, 2018. The Ukrainian President signed the bill into law on March 1, 2018.
With the purpose of reducing the level of loan risk, ensure the safety of banking operations, increase the reliability and stability of the banking system, protect the interests of depositors and other creditors of the bank, the law, in particular, foresees the creation and keeping the loan register by the NBU that is an information system ensuring collection, accumulation, change, use, and spread (provision) of information on banks' loan transactions and on the status of performance of obligations under these transactions, loan analysis and their qualification.
The loan register will get information from banks on debtors if the amount of debt (on the principal of the loan and interest) under loan transactions is equal to or exceeds 100 minimum wages (UAH 372,300), the register will also receive information from the Individuals' Deposit Guarantee Fund on loan transactions of banks on which the NBU has taken a decision to classify them as insolvent or to revoke a banking license and liquidate them, as well as information on the repayment of a debt by borrowers placed to the Credit History Bureau. The National Bank of Ukraine should give banks the right of access to information from the Credit Register to assess credit risk. The NBU is to allow banks to have access to information from the loan register for assessing loan risks.
Banks are to provide information to the register starting from April 1, 2018, and the Individuals' Deposit Guarantee Fund from July 1, 2018. Subsequently, they also have to notify their clients of the transfer of this information, who, in turn, will have the right to have access to the information in the loan register about themselves and the right to demand making changes to it if they do not agree with its content.
Banks will have to take this information into consideration when assessing their clients starting from 2019.