Senate green-lights establishment of Romania's Development Bank

The Senate adopted on Wednesday, as the first notified Chamber, the legislative proposal initiated by PSD and ALDE MPs on the establishment, organization and functioning of Romania's Development Bank - SA.

"Amid an acute lack of extra-budgetary funding, it is necessary to set up an institution whose activity consists in conducting financing, co-financing, refinancing, guarantees or other banking operations, insurance and reinsurance activities for individuals and legal entities, to ensure the development of infrastructure, the development of public interest authorities, regional development, support for research and development activities, environmental protection and the support and development of small and medium-sized enterprises in accordance with the policy assumed through the governing program," reads the explanatory memorandum of the legislative proposal.

The draft law provides for the establishment of Romania's Development Bank (BDR - SA) as an autonomous and independent legal entity capable of concluding any type of contract for the purpose of fulfilling its tasks, able to participate in public procurement, holding or disposing of any assets in agreement with its object of activity.

"The objective of the Bank is to support Romania's entrepreneurship and socio-economic development by promoting investment and securing financing through financial and advisory services and by issuing securities and raising funds or capital to support these services. In carrying out its activities, the Bank pays particular attention to the needs of SMEs, through State Aid measures (...) and major infrastructure projects," reads the draft law.

The BDR will also be allowed "to extend direct loans provided it does not exclude viable funding from commercial banks, private investors and other private financial intermediaries and will be able to provide market-based financing and obtain a return equivalent to the one obtained on the market on comparable benchmarks, provided that they do not compete with commercial suppliers in order to remedy the deficit or failures of the financial infrastructure," reads the text of the normative act passed by the Senate.

The institution is to be headed by a seven-member board of directors: a chairman and four directors, highly qualified in the economic, financial and banking sectors, appointed by the minister of public finance, two independent non-governmental directors, appointed by the minister of public finance, upon the recommendation of the Council for Economic and Social Development and who are not part of it.

According to the normative act, the status of BDR chair or director is incompatible with the capacity of parliament, civil servant, director or clerk of another credit institution. In the Senate plenum, the amendment of USR Senator Nicoleta Ramona Dinu was adopted, which stipulated that the membership of any political party was incompatible with the status of chair or director of BDR, an amendment initially rejected by the Budget Commission.

The legislative proposal, which received 66 positive votes, two abstentions and 18 negative ones, will be debated by the Chamber of Deputies, with a decision-making role in this case.AGERPRES(RO - author: Livia Popescu, editor: Florin Marin; EN - Bogdan Gabaroi, editor: Maria Voican)