Development Bank acquires low-interest loans worth 10 trillion rubels from state-owned banks
5 января 2013, 18:52
Alyaksandr Lukashenka, by a December 29 edict, directed that the government’s Development Bank of Belarus (DBB) acquire a portfolio of 10 trillion rubels ($1,158 million) worth of low-interest loans from Belarusbank and Belahraprambank.
The state-owned banks had issued the loans to finance government programs. The recipients will now have to repay the loans and interest to the DBB.
Under the edict, Belarusbank and Belahraprambank are to remove the loans from their balance sheets by transferring 4.77 trillion and 5.23 trillion rubels, respectively, worth of the assets to the DBB. In exchange, they will receive up to 4.7 trillion rubels in DBB bonds.
The Development Bank of Belarus was founded in 2011 pursuant to Alyaksandr Lukashenka's presidential edict. The Bank took over the financing of government programs from Belarusbank and Belahraprambank.
The establishment of the DBB was one of the conditions for receiving a loan from the International Monetary Fund (IMF) in 2009 and 2010.
In a public information notice issued in December 2012, the IMF Executive Board said that "the recently established Development Bank [of Belarus] should take charge of all government directed lending, thus allowing commercial banks to operate on market terms and improve credit allocation in the economy." "The Development Bank would also need to be transparently funded from the budget and prevented from issuing its own debt," the Board said.