REUTERS
The Cabinet of Ministers has supported the idea of borrowing $500 million from the World Bank under the Second Programmatic Financial Sector Development Policy Loan, or Programmatic Financial Sector DPL 2.
This is stipulated in Cabinet resolution No. 830-r dated August 12, 2015, which is available on the government's official website. By issuing the resolution, the Cabinet approved a draft letter addressed by the Ukrainian government and the National Bank of Ukraine to the World Bank regarding financial sector development policy.
By the same resolution, the Cabinet authorized the Finance Ministry to develop the project and outlined its components.
In particular, the Individuals' Deposit Guarantee Fund (upon consent) and the Finance Ministry will be working to strengthen the Fund's operating, financial and regulatory capability of handling insolvent banks.
The National Bank of Ukraine (upon consent) will be engaged in boosting solvency of the Ukrainian banking system by fulfilling plans for additional capitalization and reorganization of banks and ensuring timely enforcement measures.
What is more, the National Bank of Ukraine (upon consent) and the Finance Ministry will be working to consolidate the legal and institutional framework to improve the sustainability and efficiency of the banking system.
As UNIAN reported earlier, the World Bank, which gave Ukraine's banking sector $500 million under Programmatic Financial Sector DPL 1 in 2014, was mulling over the possibility of increasing the credit line by another $500 million, to $1 billion. The World Bank was expected to decide on DPL 2 early in 2015.
The funds are to be spent on the stabilization of Ukraine's banking system and toughening supervision of banks.