On July 21, 2023, the Law of the Republic of Belarus “On Amendments to Banking Laws” has been published, which introduced significant changes to the Banking Code.
Some changes have come into effect on July 22, 2023, but the main changes will come into force on January 1, 2024, and the full changes will come into force on January 1, 2025.
Among the key amendments:
- a number of legislative restrictions are introduced to secure the interests of borrowers, e.g., a ban on establishing conditions in a loan agreement for the payment of interest for using a loan in an increased amount in case of non-repayment of the loan timely; grounds for early repayment of the loan are limited for the lender (exceptions: attraction by banks of funds from foreign banks and international financial organizations that have a designated purpose; in case of consortium, syndicated lending with the participation of foreign banks, foreign and international financial organizations; in the process of attracting external state loans and external loans guaranteed by the Government of the Republic of Belarus);
- conditions for seizing and foreclosing funds held in banks apply to electronic money held in electronic wallets, the conditions for suspending operations on accounts apply to electronic wallets;
- regulation of the state registration and liquidation of banks, as well as the licensing requirements of banking activities are specified;
- bank corporate governance issues are clarified, including requirements to organization of banks corporate governance system, qualification requirements and requirements to the business reputation of bank officials are established;
- it is established that the decision on dividends payment (non-payment) can be taken by the bank based on the results of the year only after the audit of the annual individual financial statements of the bank;
- functions and supervisory authorities of the National Bank are expanding, including the National Bank is vested with the right to apply measures to commercial banks in case of individual violations (violations in the field of AML and actions/violations that led to risks for depositors/creditors, etc.) in the form of collecting funds to the budget up to 1% percent of the amount of the bank’s regulatory capital;
- a legal definition to operations of bank trade financing, money transfer, microgurantee is introduced; amendments are made to the regulation of bank guarantees and letters of credit;
- an exact list of documents to be submitted by individuals and legal entities for opening a bank account is established;
- there are other point changes to the Banking Code.
How can we be helpful?
We advise traditional banking institutions and non-credit financial institutions (insurance, leasing and forex companies) as well as fintech companies. Art Legal experts in the field of Banking and Finance can assist to understand the Belarusian banking and financial legislation, structure traditional lending and venture financing transactions, and offer suitable legal mechanisms from perspective of the client’s needs.
