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The government and the National Bank of Ukraine plan to amend the law on protection of creditors’ rights, but in favor of the opposite party.
All previous amendments (proposed by the Association of Ukrainian Banks - AUB) were judged by experts as being too narrow and biased towards interests of banks. The new edition is much less radical and takes into account interests of borrowers as well. For instance, the proposal on out-of-court eviction of borrowers who transferred their real estate property as mortgage was excluded from the document. Simultaneously, the Criminal Code was completed by the provision on criminal liability for financial fraud of not only private entrepreneurs, but private citizens in general.
A whole number of proposed amendments deals with protection of creditors rights in case of liquidation and bankruptcy of a legal entity.
It is also proposed to add a provision to the Civil Code to oblige parties signing a credit contract to take into account provisions of the law on consumer rights protection if the contract is signed with a private individual. It may also be prohibited to issue consumer credits in foreign currency. Finally, it is possible that it won’t be possible for banks to charge additional fees not stipulated in the credit contract and to demand compensation in case of premature settlement of the contract by the borrower.
It is possible that the law will allow different ways of debt restructuring and will prolong the period of premature settlement of debt by borrowers (if asked to by a bank) to 60 days.
Banks are disappointed with the latest edition. Representative from the Association of Ukrainian bank Anatoly Zhukov said that this one had been developed by the National Bank at direct request of the vice-prime minister Sergei Tigipko, and that the very last changes had not even been discussed with banks. In his opinion, Ukrainian legislation is already too biased towards borrowers even without those amendments.
Source: “Companion”
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