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Security of Moldovan banks threatened by hidden interests

2017.08.07 Economie Victor Ursu Print version

Following the liquidation of three devalued banks in the Republic of Moldova, international bodies have warned more about the vulnerability of the banking system as a result of dubious shareholders and obscure transactions. Subsequently, the NBM blocked two bundles of shares from two of the largest banks, but financial institutions continue to be threatened by political interests. It is Victor Ursu's opinion expressed on the show "15 minutes of economic realism".

The three largest banks Agroindbank, Moldindconbank, and Victoriabank, which hold more than 60% of the total assets in the banking system, are still under special supervision, and NBM claims that the banks' activity is not affected. At one of the banks - Victoriabank we have the share of doubtful loans of 25% of the total.

Loans have been compromised to affiliates, and the NBM is doing little for the banking sector's credibility after the millennium robbery. At the insistence of the IMF and the development partners, transparency of the shareholders of the banks was required to find the final beneficiary. Victoriabank's Board of Directors became operational only in the summer of 2016 after the bank had not had a council in 2014 by a court order. A new board of seven members was elected only in October 2015 at an extraordinary meeting of shareholders, initiated by the EBRD. However, it remained inoperable as three elected members did not submit the necessary documentation to be approved by the National Bank. It is easy to understand that arbitrary action is being taken, given that the other two banks, Moldindconbank and Agroindbank, NBM blocked significant stock packages, arguing that shareholders are acting in concert. The first is 60% and MAIB 40%, shares that would be indirectly owned by businessman Veaceslav Platon. The NBM has announced triumphantly that it has resolved the issue of shares being sold and that banks' activity is not affected.

In the case of bankruptcy of any bank in the Republic of Moldova, there is a deposit guarantee fund for individuals. At present the fund has 339.1 million lei, the money is enough to cover 57 thousand deposits worth 6000 lei. The Fund guarantees investments in domestic and foreign currency held by resident and non-resident individuals in domestic banks. For comparison, in the EU the deposit guarantee fund is 100 thousand euros. At present, the total balance of term deposits in lei is 18.3 billion lei (+ 16.5%), while those in foreign currency amount to the equivalent of 15.7 (-5%) billions of lei.

The show is made by IDIS Viitorul in partnership with Radio Free Europe.

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