Ukraine, IMF discuss creation of special financial tribunal

The National Bank of Ukraine is in talks with the International Monetary Fund (IMF) on the establishment of a special financial court in the country to settle disputes related to bank loans in order to contain the growth of non-performing loans (NPL), NBU Governor Kyrylo Shevchenko told Reuters.

“We are currently discussing the possibility of creating a specialized court or a chamber of the court in Ukraine, which will examine the problems between creditors and borrowers, as well as between investors and beneficiaries of investments,” Shevchenko said.

According to report, the proposed body aims to better protect lenders who might otherwise not be able to collect their loans through a court system with a history of corruption while aiming to reduce the proportion of non-performing loans to 24% by 2023, down from 42% currently.

“The volume of loans in the banking system is over one trillion hryvnias, or about $ 40 billion. This is a significant amount that deserves to be defended,” Shevchenko said.

He also added that a reduction in bad debts would help attract foreign private investors into the Ukrainian banking system.

According to him, more than half of the sector remains in the hands of the State, and it is a “big systemic risk”. Therefore, the central bank wants to reduce that figure to 25% in the coming years, he said.

Shevchenko said earlier that this year Ukraine expected to receive three tranches from the International Monetary Fund (IMF) worth around $ 2.2 billion.

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