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Ministry of Justice

Republic of Moldova

On June 9, 2022 No. 1724

RESOLUTION OF NATIONAL BANK OF THE REPUBLIC OF MOLDOVA

of June 2, 2022 No. 114

About approval of Regulations about investments of banks into the real estate

Based on the item c) parts (1) Art. 27 of the Law No. 548/1995 on National Bank of Moldova (pereopublikovan: The official monitor of the Republic of Moldova, 2015, No. 297-300, the Art. 544), with subsequent changes, and the item and) and d) Art. 83 of the Law No. 202/2017 on activities of banks (The official monitor of the Republic of Moldova, 2017, No. 434-439, the Art. 727), with subsequent changes, the Executive committee of National Bank of Moldova DECIDES:

1. Approve Regulations about investments of banks into the real estate it (is applied).

2. Declare invalid the Resolution of Administrative board of National Bank of Moldova No. 384/1999 on approval of Regulations on investments of bank into non-current tangible assets.

3. This resolution becomes effective after one month after publication in the Official monitor of the Republic of Moldova.

Chairman of Executive committee

Octavian to Armash

Approved by the Resolution of Executive committee of National Bank of the Republic of Moldova of June 2, 2022, No. 114

Regulations about investments of banks into the real estate

I. General provisions

1. These regulations are applied to banks with the location in the Republic of Moldova, to departments of banks of foreign states which are licensed by National Bank of Moldova, further - "banks".

2. These regulations determine procedure banks of real estate investments, ownerships of the assets transferred to bank in ownership / acquired instead of return of debt for the purpose of decrease or avoidance of losses as a result of any financial activities (further - the assets transferred to bank in ownership / the debts acquired instead of return).

3. In these regulations of real estate investment is any ownership / acquisition (including acceptance on the basis of decisions of degrees of jurisdiction or according to pledge agreements), allocation of money and/or acceptance of donative means for the purpose of ownership/acquisition by fixed assets and the parcels of land by bank.

II. Restriction of investments

4. Investments of bank into the real estate shall not exceed 50% of its own means.

5. In case of determination of inclusion of cost of real estate investment within the limit provided in the item 4, book value which represents the amount on which assets for date of creation of balance, and equal to the initial, corrected or revaluated value minus their depreciation and impairment are estimated undertakes.

6. Requirements of item 4 do not extend to the assets transferred to bank in ownership / the debts acquired instead of return.

7. The reporting of banks on their real estate investments provided in the item 4, is performed according to the regulations of National Bank of Moldova concerning the reporting.

III. Policy and internal procedures

8. In case of implementation of real estate investments by bank, the bank develops the corresponding domestic policy and procedures of management, financial accounting and control of these types of investments.

9. The bank creates the commission authorized and given authority on supervision of the activities connected with real estate investments.

The commission studies and generalizes the data on real estate investments necessary for adoption of relevant decisions by governing body of bank.

IV. The assets transferred to bank in ownership / acquired instead of return of debts

10. The assets transferred to bank in ownership / acquired instead of return of debts are registered, coordinated and checked separately from other investments into assets.

11. The assets transferred to bank in ownership / acquired instead of return of debts are classified by bank as assets, held for sale, and are recognized the balance sheet only if the bank is confident in high probability of their realization according to the International Financial Reporting Standard 5.

For this purpose, about day of recognition in the balance sheet of the assets transferred to bank in ownership / the debts acquired instead of return, the bank shall have specific sales plans of the corresponding assets with indication of the actions and methods used for contribution to their sale, potential buyers and the planned sale terms no more than 12 months from the date of classification of asset, held for sale on the basis of supporting documents (the agreements of intent, statements, offers, research/statistics showing liquidity of goods in the market, demonstrating that the mortgage cost of the sold goods is much lower than its market value, etc.). Otherwise, these values are reflected bank in the account of the memorandum for their further accounting and realization.

When implementing accounting entry, the assets transferred to bank in ownership / acquired instead of return of debts are reflected at the smallest cost between total cost of debt of debtor (debt remaining balance, the added percent and reflected in the balance sheet commission charges, penalty fee and other credit debts) and fair value (market value) of the specified assets minus potential expenses as a result of sale.

The bank shall recognize loss (profit) on depreciation for any further decrease (growth) in book value of the assets transferred to bank in ownership / the debts acquired instead of return according to the International Financial Reporting Standard 5. The profit recognized by bank from any subsequent growth of fair value less the costs resulting from asset sale, transferred to bank to ownership / the debts acquired instead of return cannot exceed the accumulated loss from depreciation recognized earlier.

12. The bank has the right to classify in the balance sheet the assets transferred to bank in ownership / acquired instead of return of debts as assets, held for sale for 12 months from the date of their recognition in the balance sheet.

13. If the assets transferred in ownership / acquired instead of return of debts were not realized for the objective reasons (because of the events and circumstances which are not managed by bank) in time, 12, bank specified in the item has the right to file in National Bank of Moldova petition on approval for prolongation of term of their classification in the corresponding category. Prolongation of term of classification of the corresponding assets is requested by bank at least, than in 2 months prior to the expiration specified in the item 12, only in the presence of the events or circumstances established by the International Financial Reporting Standard 5.

The following information / documents are enclosed to this application at least (copies of documents are certified by bank):

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