The World Bank has expressed support for the reform of the governance of Ukraine’s state-owned banks (SOBs), and called it an essential step towards improving the performance of the country’s banking system and the economy as a whole, Ukrainian news agency UNIAN has reported.
“Key to this reform is the introduction of a two-thirds majority independent supervisory board,” the Ukrainian office of the World Bank said in a statement, pointing to a modification of Ukraine’s Law on Banks and Banking.
According to the World Bank, these new supervisory boards “are expected to take the lead in reforming state-owned banks, particularly in terms of corporate governance and the resolution of non-performing loans.”
In accordance with the modified law, the Cabinet of Ministers nominated new supervisory boards “through a competitive selection procedure,” the statement continued.
The World Bank’s office highlighted that it was the duty of the National Bank of Ukraine (NBU) to formally approve the nominations through an independent assessment, considering strict standards, especially regarding conflicts of interest.
“The World Bank supports the NBU in exercising its duties in this area,” the organisation stressed.
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