Bank Dnepr expert speaks about topical issues of legal support of banking activities

14 February 2019

Ukraine is among the leaders among the countries with the most toxic loans. Such loans still exceed half of the total loan portfolio of Ukrainian banks. The load of problem loans puts pressure on the sector's profitability indicators, restrains credit appetites of financial institutions and increases the cost of lending to borrowers, increasing the “risk pay”. A fundamental improvement in the situation is hampered by the absence of effective legal levers of influence on unscrupulous borrowers.

Ways and tools for banks to deal with malicious debtors, opportunities and obstacles to increase their efficiency were discussed at the session “Problem Assets” at the V Legal Banking Forum - an annual event that brings together leading bankers, lawyers, representatives of regulatory bodies for professional analysis and constructive discussion trends of the financial market, its further development paths, new challenges and prospects.

Alexander Yaretsky, Head of the Legal Department of the Bank Credit Dnepr Bank, suggested that the topic “Problem Assets: Legal Status of“ Internal Lawyers ”be discussed by the Forum Speaker. The expert talked about the “lawyer monopoly”, which allows legal or natural persons to be represented in court exclusively by lawyers, thus leaving tens of thousands of lawyers defending the interests of their employers-legal entities in court, as Bill No. 9055, which provides for a simplified procedure for ordinary practicing lawyers The status of a lawyer has not yet been adopted.

“The banking community insists on the speedy adoption of draft law No. 9055, which provides for the right of representation as an internal lawyer for their employer on the basis of an employment contract. It is internal attorneys that in most cases are the most optimal option for banks in terms of price / quality ratio. They enter into action at the preliminary stage, without requiring a fee for studying the documents, developing a strategy, as well as paying for each court visit, in contrast to outsourcing. Internal attorneys are more controllable and motivated to achieve a result, and the procedure for their employment, wage conditions and regulation of activities are standardized and more understandable for management. In the meantime, before the adoption of draft law No. 9055, employers are forced, in addition to employment contracts, to conclude separate agreements on the representation by internal attorneys of the interests of their employer in court. This increases the burden on the business and creates additional tax risks for both employers and internal lawyers, ”said Alexander Yaretsky.

Speakers and attendees of the forum discussed current issues related to legal aspects of banking disputes with state regulatory bodies, recent changes in the areas of financial monitoring and currency control, the occurrence of fintech as a new challenge for the banking sector and a catalyst for its further development.


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