Ukraine, IMF discussing creation of special financial court - Shevchenko

Ukraine, IMF discussing creation of special financial court - Shevchenko

The National Bank of Ukraine is holding talks with the International Monetary Fund (IMF) about creating a special financial court in the country to settle bank loan disputes to tame growth of non-performing loans (NPLs), NBU Governor Kyrylo Shevchenko has told Reuters.

"We are now discussing the option of creating a specialized court or chamber of the court in Ukraine, which will consider issues between creditors and borrowers, as well as between investors and recipients of investments," Shevchenko said.

According to the report, the proposed body is intended to give better protection to lenders that may otherwise be unable to recover their loans through a judicial system with a history of corruption while aiming to reduce the proportion of loans that are non-performing to 24% by 2023, down from the current 42%.

"The volume of loans in the banking system is more than one trillion hryvnias, which is about $40 billion. This is a large amount and worth defending," Shevchenko said.

He also added that a reduction in bad loans would help to attract foreign private investors into Ukraine's banking system.

According to him, more than half of the sector remains in state hands, and this is a "big systemic risk." Therefore, the central bank wants to bring that down to 25% in the coming years, he said.

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


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