The parliament proposes a solution for NPLs: creating a “bad assets bank” using a nationalized state bank.

The creation of a bad asset bank will allow the settlement of current and future problem debts accumulated during the full-scale war, said the head of the Parliamentary Committee on Finances, Danylo Hetmantsev.

“Over the past 30 years, the world has accumulated significant positive experience in the functioning of such institutions,” he noted.

A special institution can be created based on one of the small banks that recently became state property because of sanctions. The institution’s objective is to take onto its balance sheet, at a certain discount, all or most of the current and future military NPLs for the purpose of further passive or active management of stressed assets, which will include attempts to obtain compensation for destroyed assets through centralized claims against Russia.

According to Hetmantsev, this would relieve commercial banks of this burden, allowing them to concentrate on building healthy loan portfolios and speeding up a recovery in lending.