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Poroshenko returns bill on restructuring currency credits to parliament

Poroshenko returns bill on restructuring currency credits to parliamentUkrainian President Petro Poroshenko has vetoed a bill on restructuring loans issued in foreign currency No. 1558-VIII and retuned it with his proposals to the Ukrainian parliament for repeated discussion.

"…the head of state returned the law with his proposals to the Verkhovna Rada for repeated discussion, and the Cabinet of Ministers is instructed to urgently submit an alternative bill, taking into account some provisions of law No. 581-VIII of July 2, 2015 on restructuring of liabilities in foreign currency," the press service of the president reported late on Friday.

The press service said that the proposals are related to the termination of liabilities under credits agreements after passing of property used as collateral to ownership of the creditor or receiving a claim to collect the property used as collateral or the voluntary sale of this property. The president recommended that lawmakers agree the document with experts and international financial institutions.

As was reported, the bill was passed by Ukraine's parliament on July 2, after which a number of lawmakers called on the president to veto the document.

The NBU in turn said on July 3 that the adoption of this bill would do considerable damage to Ukraine's financial and banking system, posing a threat to all citizens' well-being. "If all the loans given to resident individuals in foreign currency are converted into the hryvnia at a rate of UAH 5.05 per U.S. dollar, the banking system's losses will total about UAH 100 billion," the NBU said.

Parliament Speaker Volodymyr Groysman signed the bill only after a new, government-prepared bill had been tabled in parliament to restructure mortgage loans in foreign currency, which suggests certain benefits, including for participants in the Anti-Terrorist Operation (ATO). In particular, the Cabinet proposes that individuals be allowed to restructure their loans for the acquisition of housing, which is the only one in possession of a household, along with writing off 25-75% of a mortgage loan. ATO participants will enjoy an 80-100% write-off of the mortgage loan. Such terms are applicable only if the balance on such loans was not more than UAH 2.5 million as of January 1, 2015, and there were no overdue debts as of January 1, 2014, or they had been repaid. Such loans are estimated at about UAH 20 billion, or 40% of all the mortgage loans. The proposed algorithm was supported by 19 large Ukrainian banks, accounting for 75% of the country's banking system.
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