Parliament registers Government's draft law to solve bad currency mortgage loans

The Verkhovna Rada has registered a draft law No.4004 "On the restructuring of hard currency loans taken by citizens of Ukraine to purchase single residential property (mortgage loans)". The draft law was jointly elaborated by the Ministry of Finance, National Bank of Ukraine and Ukrainian Banks Association.

The Ministry of Finance is actively working to get Ukraine back on track of economic growth and taking resolute steps to resume loan supply for the Ukrainian economy as well as to solve debt issues affecting citizens and business in Ukraine.

One of the problems currently hindering the economic recovery of Ukraine has to do with the lack of loans for business which is due to a high volume of bad loans disabling banks from providing new ones. Another aspect of this issue is a high debt burden on Ukrainian households resulting predominantly from mortgage loans taken before the crisis of 2008.

«Our opinion is that restructuring of loans taken in hard currency can only be possible for citizens who took them to purchase their own residential property and are at risk to be left without their only property due to their inability to re-pay the loans. This is the only approach which can be considered fair to the other citizens of our country who did not take loans and lived at their own cost», Ministry of Finance Natalie Jaresko said.

The draft law is expected to grant a restructuring opportunity to approx. 37000 families. The expected restructuring volume is more than USD 20b. It must be noted that the draft law does not pose any risks to the banking system of Ukraine: it was agreed with 19 biggest banks of Ukraine which together own 75% of assets in the banking system of the country.

The Ministry of Finance is counting on the support of the MPs for this draft law.