The Ministry of Finance prompts the Parliament to adopt the draft Law “On the restructuring of the obligations of the citizens of Ukraine related to loans taken in foreign currency to purchase a single residential property (mortgage loans)” (No. 4004) which was elaborated by the Ministry of Finance jointly with the National Bank of Ukraine and the Ukrainian Banks Association.

The Ministry of Finance is actively working to recover sustainable economic growth; an important condition for this is the resumption of loan supply by banks which is impossible without the settlement of bad loans burdening citizens and business. The above draft law is aimed to settle these issues.

According to the estimates of the Ukrainian Banks Association, there are approximately 37.000 households in Ukraine which would be entitled by the draft law to restructure their mortgage loans equal to approx. $1 billion. The draft law elaborated by the Ministry of Finance takes into account social issues and ensures support to those who really need it.

“Our opinion is that the hard currency loans can be restructured only for citizens who took them to purchase residential property for themselves and now can lose their only home due to their current inability to serve their debt. This would be the only fair approach towards the other citizens of our country, since most of them did not take loans and made ends meet on their own”, Natalie Jaresko said.

Also, according to the Ministry of Finance, the draft Law proposed by the Government does not pose any hazard for the banking system: it was agreed with the banking community. In the course of restructuring banks will have to write off 25% to 100% of respective loans, convert the pending loan amount in hryvnia using the NBU exchange rate valid on the day of the restructuring as well as ensure that for 3 years the interest rate for the respective loan does not exceed the rate valid for the loan in hard currency.

“This draft law is a simple and clear way to settle the issues of the currency loans taken for the purchase of single residential property; it will support the banking system in general and thus contribute to economic growth and to the prosperity of all Ukrainians”, Natalie Jaresko stressed.

The Ministry of Finance is opposed to the alternative draft law No. 4004-1, since it does not balance the interests of debtors and creditors and could seriously affect the Ukrainian banking sector and undermine the financial stability reached through hard efforts of the Ministry of Finance and the National Bank of Ukraine.