MPs supported the law, which reduces the presence of the state in the banking market

In the first reading, the Verkhovna Rada (the Ukrainian Parliament) approved the draft law No. 11474 on the specifics of the sale of state-owned shares in the authorized capital of banks, that is, on the specifics of the privatization of state-owned banks.

The MP Yaroslav Zheleznyak reported this.

249 MPs voted for it. This law is one of the requirements of the World Bank, it should be adopted in two readings during September.

The main goal of the document is to reduce the presence of the state in the banking market. The explanatory note states that the draft law was developed taking into account the recommendations of the experts of the International Monetary Fund and the World Bank. It should establish clear procedures for the sale of state-owned shares in the authorized capital of banks, on a competitive basis and with the participation of an adviser.

Here is what else the draft law provides:

• to extend the effect of the current Sales Law to all public sector banks;
• to expand the circle of potential investors whose sale the state is ready to consider;
• allow the sale of any share of the state in the bank;
• increase the requirements for legal entities that the state can engage as financial advisors for sales;
• include international donors in the selection procedure of financial advisors for the sale and the procedure of the sale itself;
• update the rules for determining the price and conducting the auction, as recommended by the World Bank;
• take into account the probability that only one potential investor can participate in the auction;
• bring the requirements of the sales contract in line with market practices;
• to prevent a negative influence on the sale procedure from former beneficial owners (the note explains that this is relevant for SENS BANK JSC) or current minority shareholders (relevant for UKRGAZBANK JSC).

In addition, the document proposes to make it impossible to participate in the competition for the sale of shares of public sector banks of people who are under sanctions or connected with Russiaʼs war against Ukraine.

• Ukraine receives financial assistance through World Bank projects.