Finances

​PARLIAMENT EXTENDS TERMS OF INTRODUCING NBM EXTERNAL ADMINISTRATION IN BANKS

27 september, 2018

The parliament approved in a first reading a specifying amendment to the Law on bank recovery and bank resolution, according to which the National Bank of Moldova (NBM) has the right to introduce external supervision in commercial banks for an indefinite period until the external administration fulfills its goal.

Surprisingly for several MPs, the amendment was presented by Democratic Party deputy Sergiu Sirbu, though it would be more logic that Chairman of the parliamentary Standing Committee on Economy, Budget and Finance Stefan Creanga to do this.

According to the Democrat MP, the amendment is aimed at specifying the Law provision which says about the NBM’s right to appoint an external administrator in commercial banks. In the current Law, the term of external administration is restricted to one year with the right of extending the administration for one more term. According to the new amendment, the administration in commercial banks may be extended for a longer period of time, if necessary.

A number of deputies stood against the granting to NBM of the right of timeless external administration in banks. Thus they proposed to establish a concrete term – a year or three years.

Moldovan Communist Party deputy Oleg Reidman maintains that this amendment is aimed at resolving the technical issue, which concerns a concrete Moldovan bank. As the chairman of the Parliament Andrian Candu called on MPs not to tell the name of the bank – neither in discussions nor in explanatory notes to draft laws, MPs did not pronounce the name of the bank for the sake of which the addition is introduced in the law.

“Specialists understand the motifs of the proposed addition, but it can hardly resolve the bank’s problem. You want to extend the administration for the period of parliamentary elections [February 24, 2019], but do not guarantee that this will resolve the problem of external administration”, Reidman said, most likely meaning the keeping of assets intact and the selling of the newly-issued shares for foreign investor.

In response, Sirbu said that such guarantee is not a goal of the draft and that the NBM can achieve a sustainable development of the Moldovan banking system due to the extension of the term of external administration in banks.

This bill was approved in a first reading. The legal commission promised to collect the lacking conclusions by the second reading of the document.

Comments [ 1 ] Add Comment

  1. 2019.09.13 08:01 Saqib Shaikh
    Nice post,

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