LOWER HOUSE DEBATES BILL RESCINDING LAW ON BANK REHABILITATION

ZAGREB, May 12 (Hina) - The Croatian parliament's House of Representatives on Friday resumed its fourth session with a debate on a government-motioned bill rescinding a law on the financial rehabilitation of banks. With this final bill, the government after nine years wants to rescind the obligation to automatically rehabilitate banks with funds from the state budget, Deputy Finance Minister Damir Kustrak said presenting the bill. According to Croatian National Bank data, 50 billion kuna (US$6 billion) have been earmarked from the state budget since 1991 for the rehabilitation of banks, and the payment of old foreign currency savings and ensured savings. Since 1994, 6.5 billion kuna (US$774 million) have been earmarked for bank rehabilitation alone. Kustrak said there was no longer need for such actions because all banks had been privatised, with the exception of Hrvatska Postanska Banka. By discontinuing the past practice of bank rehabilitation, the government is sending a clear signal to bank boards and stockholders that they have to take care of themselves on their own, the deputy minister said. The government also wants to send a clear message to Croatia's citizens that the payment of ensured savings is not jeopardised by the discontinuation of bank rehabilitation and in case a bank goes bankrupt, Kustrak concluded. (hina) ha jn