Putin signs law on debt repayment by Crimeans to Ukrainian banks

Russian President Vladimir Putin has signed a law on the repayment of debts by residents of the annexed Crimea to Ukrainian banks.

The corresponding document was published on the president's website on Monday, reported RIA Novosti.

In particular, it gives the borrower the right to apply to the Deposit Protection Fund (DPF) established by the Deposit Insurance Agency (DIA), with confirmation of freedom from cooperation with persons entitled to demand payment of the debt. At the same time, the Fund's potential to restructure the debt of the borrower is expanding.

"The borrower also has the right to request a debt restructuring. The Federal Tax Service Supervisory Council can make a decision until the debt is written off, if there are grounds for doing so," the report says.

The DIA must transfer 1.5 billion rubles to the fund to implement its activities.

The "head" of Crimea, Sergey Aksyonov, earlier noted that the law would allow for the zeroing out of loans up to 5 million rubles that had been taken in Ukrainian banks by legal entities and individuals. Thus, all enforcement proceedings against Crimean borrowers whose loans do not exceed this amount will be terminated, and all arrests must be lifted within 90 days.

Member of the Federation Council Olga Kovitidi previously stated that in addition to writing off debts up to 5 million rubles, the regional bill provides for a number of other preferences for Crimeans. For example, in case of repayment of 50% of the debt, the remaining 50% will be written off; if 40% of the debt has been repaid, 20% will be written off. According to Kovitidi, Crimean representatives are waiting for a position from the Ministry of Finance.

In May 2014, the National Bank prohibited banks from working in the Crimea; this was because of the conditions of Russian occupation, as banks could not function in accordance with the law.

Banks in the Crimea could work according to Ukrainian rules until January 1, 2015; however, to do so, they needed to notify the Russian Central Bank of their desire to continue their work and provide the Bank with data on their depositors and creditors. These requirements are contrary to the current rules of the NBU (National bank of Ukraine), and their implementation fraught with sanctions.

  Crimea, debt, banks, Ukraine, Russia, Putin