Central bank empowered to forcedly liquidate credit institutions

06/10/15 14:36

Central bank empowered to forcedly liquidate credit institutions

The Supreme Council has approved in first reading the amendments to the law "On Pridnestrovie's Central Bank"

MPs have approved in first reading the government's draft law that empowers the central bank to forcedly liquidate credit institutions. To execute this function, a liquidation commission will be formed under the Pridnestrovian Republican Bank.

Following the lawful decision of the court to forcedly liquidate a credit institution, in compliance with the current law, the state administration shall form a liquidation commission, which also includes the regulator's representative.

However, as emphasised in the explanatory note to the draft law, «it is difficult for a liquidation commission to perform its functions when formed under the state administration due to the specific nature of credit institutions, wherefore the bill suggests that the PRB should assume the function of forced liquidation.

Giving the central bank the functions of a liquidator and endowment insurance is also stipulated in the draft law «On insurance of deposits of individuals at Pridnestrovie's banks». Vesting such authorities in the regulator will enable the state budget to escape costs for establishing an individual agency, analogous to Russia's Endowment Insurance Agency, which is also in charge of liquidating credit institutions.


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