Updates to the norms on active operations of banks

In pursuance of the Law of Ukraine On Crimea Free Trade Zone and specificity of running business in the temporary occupied territory of Ukraine (hereinafter – the Law), the Management of the National Bank of Ukraine adopted the resolution on 19.11.2014, registered under No. 727, which enters amendments to regulations on formation and use of reserves by banks of Ukraine to reimburse possible losses due to active banking operations (hereinafter – Resolution No. 727), the press-office of the Ukraine’s National Bank reports.

The law provides for release of persons forced to relocate from repaying both the mortgage loan’s  principal and interest accrued within the period of the temporary occupation, if the mortgage is secured by the property located (registered) in the territory occupied after conclusion of the mortgage agreement.

Resolution No. 727 introduces amendments to chapter 1, part ІІ of the regulations on formation and use of reserves by banks of Ukraine to reimburse possible losses arisen due to active banking operations, as approved by Resolution of the National Bank of Ukraine dd. 25.01.2012, No. 23, which envisages the right of banks to classify the above said mortgage loans into quality categories defined by the bank on the date of beginning of temporary occupation of the said territory.

The norms that are set out in Resolution No. 727 and being enacted are aimed to reduce negative impact of the temporary occupation of some territories of Ukraine on the financial status of banks-creditors.