Moldovan cabinet approves draft law on banks' work

Chisinau, 23 June /MOLDPRES/ – The Cabinet of Ministers approved the draft law on the activity of banks today, which will replace the existing Law of the financial institutions, the government’s communication and protocol department has reported.   

The document transposes the international standards and practices related to the licensing, regulation and supervision process of the National Bank of Moldova (BNM) and also maintains the legal provisions developed and adopted in line with the International Monetary Fund’s (IMF) recommendations.

The new law will allow to develop effective supervisory tools to prevent and minimize possible shortcomings in banks’ operations at incipient stages, thus ensuring the banking sector stability and protecting the depositors’ interests.

Specifically, it is foreseen to extend the rights and attributions of the BNM in the process of assessing and supervising banks, including increasing and diversifying the sanctions imposed on banks.

As to ensure the efficient performance of the supervisor’s competencies and the strengthening of corporate governance in banks, the draft law provides for some derogations from the Act on Joint Stock Companies regarding the attributions of the general meeting of shareholders, the council and the executive body and the exclusion of the census commissions from the list of the banks’ control bodies.

Another novelty concerns the bank’s obligation to have adequate internal capital in relation to the risks to which it is exposed.

Similarly, new concepts and notions are included, as the meaningful change of the notions of “branch” and “subsidiary”.

The Draft Law on Banking Activity was developed within the EU-funded twinning project.