09:51 03.08.2021

Zelensky signs law on improving mechanisms for withdrawing banks from market, satisfying creditors' claims

2 min read
Zelensky signs law on improving mechanisms for withdrawing banks from market, satisfying creditors' claims

President Volodymyr Zelensky signed a law amending some legislative acts of Ukraine to improve the mechanisms for withdrawing banks from the market and meet the requirements of creditors of these banks (1588-IX), which the Verkhovna Rada adopted on June 30, the presidential press service said.

"The document will help preserve the bank's assets and prevent the loss of its assets, meet the requirements of as many creditors of the financial institution, which is withdrawn from the market, and reduce government spending on insolvent banks," the statement said.

It states that according to the law, the Deposit Guarantee Fund may initiate proceedings (in particular in foreign and international courts) to recover damages caused to the bank due to: 1) nationalization or expropriation of the bank's assets; 2) requisition, destruction, damage or devaluation of the bank's property due to military actions, armed conflicts and social unrest.

"In addition, the document defines the legal basis for compensation for damages by the person who caused damage to the bank and creditors, as well as the person who received property benefits as a result of such actions. In particular, provides for voluntary compensation for such damage (losses)," the President's Office said.

They also said that the law also clarifies the procedures for withdrawal of an insolvent bank from the market, liquidation of banks, the powers of the Deposit Guarantee Fund, etc.

The law comes into force the day after its publication.

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