The National Bank of Ukraine takes steps to facilitate loan trades

On 23 March 2017, the Board of the National Bank of Ukraine ("NBU") adopted resolution No. 26 (the "Resolution") authorising that on 10 April 2017 the following important and long-anticipated amendments to the rules on foreign currency lending to Ukrainian borrowers will become effective (the "Amendments"):

  • Ukrainian account banks will be able to register the change of the lender directly with the NBU without any cooperation from the borrower’s side in case of assignment or transfer of a loan to a foreign lender or between foreign lenders;
  • Subject to certain exceptions, loan registration documents will be automatically examined and verified by specialised NBU software; and
  • Information about loan registration and any subsequent amendments will be stored in the NBU’s electronic registry accessible by Ukrainian account banks. The extract from such electronic registry, together with the notification from the Ukrainian account bank, will be sufficient evidence of the loan registration with the NBU.

The Amendments are a significant step forward from the previous heavily regulated foreign loan registration procedures, which, amongst other things, blocked the development of a secondary loan market in Ukraine. Following the Amendments, trading loans will no longer depend on a Ukrainian borrower fulfilling all the registration formalities for the change of lender with the NBU. It is expected that both lenders and Ukrainian borrowers will benefit from the Amendments as a liquid secondary loan market allows banks to free up capital, manage credit risk and use loan origination capabilities more efficiently. At the same time, it allows borrowers to benefit from interest rate discounts on subsequent loans.

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