Due to adverse banking developments in the Ukraine, the National Bank of Ukraine (NBU) has proposed an amendment to allow banks more recovery time, the regulator announced on Wednesday.
The amendment states that a bank would not become insolvent or a problem bank if domestic currency shortfalls were deemed the cause of a particular finance institution falling below stringent NBU requirements.
"The developments in the Crimea and eastern Ukraine, the disruption of economic ties between the enterprises, and a fall in real household income have seriously deteriorated the situation in the banking sector," Oleksandr Pysaruk, first deputy governor of the NBU, said. "The banking system needs time to restore its capital. Therefore, the National Bank initiates amendments to the law, which would buy time for banks to resume their normal functioning and encourage banks to make concessions to borrowers in restructuring their debts."
This amendment would last until Jan. 1, 2019 if adopted.