Ukrainian govt approved draft law on state banks management

Ukrainian govt approved draft law on state banks managementUkraine's Cabinet of Ministers at a meeting on May 5 approved the bill on amendments to a number of legal acts regarding state banks management.

"The bill is developed as part of implementing the foundations of strategic reform of the public banking sector. It is aimed at depoliticizing and improving the efficiency of work of state-owned banks for converting them into profitable institutions. The bill is agreed with the IMF and is part of our commitments in the framework of cooperation," Minister of Finance Oleksandr Danyliuk said presenting the bill.

He said that in February this year the Cabinet already approved the bill and sent it to the Verkhovna Rada, however, due to changes in the composition of the government, the document was returned to the Cabinet and last week was improved to accelerate its adoption in the parliament.

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The minister stressed that the main elements of the bill suggest the revision of principles and mechanisms of corporate governance in state-owned banks. The document provides for the creation of a system isolated from political influence to manage state banks through supervisory boards, which will include independent directors, selected at a tender under a quota principle. To this end, the Ministry of Finance will create a tender commission consisting of three members from the president and three members from the Cabinet. At the same time, supervisory board members will be determined exclusively from the candidates selected by recruiting companies with no less than ten years of experience in recruiting for the banking sector.
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