The Cabinet approved the draft Law on the Activity of Banks, which will substitute by the current Law on Financial Institutions, IPN reports. The document transposes the international standards and practices concerning the licensing, regulation and supervision of the National Bank of Moldova and simultaneously maintains the legal provisions that were worked out and adopted in accordance with the recommendations of the International Monetary Fund.

According to the authors, the new law will enable to develop efficient instruments for surveying, preventing and minimizing possible shortcomings in the work of banks at incipient stages, ensuring thus the stability of the banking sector and protecting the interests of depositors. In particular, the rights and powers of the National Bank of Moldova to assess and supervise the banks will be extended. The penalties imposed on banks will be made harsher and diversified.

The banks will be obliged to have an appropriate internal capital in relation to the risks to which they are exposed. The bill contains new concepts and notions.

The Law on the Activity of Banks was drafted within the twinning project financed by the European Union.