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Ukrainian Parliament Approves Bank Legislation That Paves Way For IMF Funds

The banking reform bill passed by the Ukrainian parliament is expected to help seal a $5 billion aid deal with the IMF. (file photo)
The banking reform bill passed by the Ukrainian parliament is expected to help seal a $5 billion aid deal with the IMF. (file photo)

KYIV -- Ukraine's parliament, the Verkhovna Rada, has approved a banking bill that will help open up billions of dollars worth of aid to Kyiv from the International Monetary Fund (IMF).

The bill, approved by 270 lawmakers on May 13, prevents the former owners of banks that were nationalized or liquidated in recent years during a widespread financial sector clean-up from regaining ownership rights or receiving monetary compensation.

President Volodymyr Zelenskiy, who was at the parliamentary session, called the bill a "historic" document that "will help us to defend our economy."

Though the legislation also has other implications for Ukraine's banks, analysts say its main purpose is to prevent one of Ukraine's most powerful tycoons, Ihor Kolomoyskiy, the former co-owner of PrivatBank, from regaining ownership rights to the bank.

The IMF is said to have insisted upon approval of the banking law amid signs the government was considering returning PrivatBank, which is in the midst of a major legal and political fight involving

Ukrainian business tycoon Ihor Kolomoyskiy
Ukrainian business tycoon Ihor Kolomoyskiy

The bank was nationalized in 2016 when international auditors found a $5.5 billion hole in its balance sheet. Kolomoyskiy, who has close ties to Zelenskiy, has insisted that the bank was improperly nationalized by Ukrainian regulators.

Kolomoyskiy has denied any wrongdoing and maintains he is the rightful owner of PrivatBank.

Ukraine has been in talks with the IMF for months about a three-year, $5.5 billion loan tied to reforms to help the country meet a spike in debt repayments this year.

Matti Maasikas, the European Union's ambassador to Ukraine, hailed the bill as "a vital measure to protect public finances and Ukrainian taxpayers."

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