New Law on Savings and Loan Associations has been published in Official Gazette

The new Law on Savings and Loan Associations has been published in the recent issue of the Official Gazette of Moldova and is to enter into force on 1 January 2008. Within 6 months, the Government shall submit to the Parliament proposals concerning the adjustment of the legislation in operation to the newly adopted law, and shall adopt normative acts with a view to enforcing the law. Under the law, savings and loan associations, depending on the type of licence held, can grant loans and accept sight and term deposits; can provide additional services, consulting services, etc. The association can invest the funds unused for granting loans, in agreement with the investment policy approved by the association’s board. Savings and loan associations will be divided into 3 categories, depending on the range of services they will be authorised to provide. The A-type licence will be issued to the associations whose members are individuals only and target a narrow series of services, such as operating, investment or consumer credits. The licence is valid within the limits of a first-level administrative unit, which registered the association, and it does not allow setting up branches or subsidiaries. The B-type licence allows providing supplementary services, such as mortgage loans, consortium loans, etc. This licence is valid in the second-level administrative unit and gives the permission to found branches and subsidiaries. The third category of licences, the C-type one, is issued to associations whose members are both individuals and entities and allow providing a various range of services, being valid on the whole territory of the country. The law also stipulates establishing a “Central Association”, a body which aims at contributing to the development of the savings and loan associations and to the improvement of the quality of the services rendered. The central association can take out or grant loans to associations. At present, there are nearly 550 associations with almost 100,000 members and clients. The assets owned by these associations amount to MDL 450 mln.