LOWER HOUSES DISCUSSES NEW BANKING LAW

ZABREB, Nov 19 (Hina) - The Croatian National Sabor's Lower House on Thursday continued its session which commenced last week. Today's talks were dominated by the bill on banks. With the bill, the Government intends to strengthen protective measures for investors, business partners and shareholders. The bill entails increased authority for the Croatian National Bank (HNB), to take action if it discloses problems in certain banks, said Assistant Finance Minister Ivan Vrljic presenting the bill to the Croatian Sabor. However, because of the number of criticisms and proposed amendments by various committees; legislative, finance and state budget, economy, development and reconstruction, it was recommended the bill be submitted for a third reading. Vrljic highlighted some of the significant features of the bill. He said that the new law would increase security of the banking system, set up stricter conditions to enter the banking market, establish clearly defined ties (legal & private) parties, determine definitions of bank exposure etc. Innovations to the bill since its first reading were described by Vrljic highlighting regulations for banking obligations to include their shares on the Zagreb stock market. The bill includes provisions by which board members and members of supervisory boards would be responsible for the bank's business submitting their own personal property as security. It would also be necessary for banks to report to the HNB of any changes to the structure of share-holders and would prohibit loans and guarantees for purchases of one's own shares and finally would improve reporting and auditing mechanisms. Banks, as capital gaining businesses have specific status, however the final bill has not limited business liberties but placed stricter business regulations, Vrljic said. The legislative committee proposed 131 amendments to the 136 articled bill. The finance committee proposed 81 amendments. A series of objections were made to the actual text of the bill. The economy committee asked for a different approach to rehabilitating banks and opposes the high allowances foreseen for board members of banks which have been rehabilitated. Confidentiality of bank accounts should not be released without the prior approval of the account holder, or rather, high penalties for violations of confidentiality of bank accounts, the committee said. (hina) sp jn