Banks support new freedom to dispose of bad debts

The general director of the Polish Association of Banks (ZBP), Krzysztof Pietraszkiewicz, has announced that ZBP supports a proposal to introduce regulations allowing banks to use part of their bad debt reserves to back entrepreneurship. At the beginning of February, Economy and Labor Minister Jerzy Hausner stated, without going into details, that he would propose a banking bill to the Finance Ministry which would increase the value of loans granted in some economic sectors. "Present regulations do not encourage banks to dispose of bad debts from their loans portfolio," Pietraszkiewicz told a press conference. The ZBP wants banks to be able to dispose of old loans, some as many as ten years overdue. Currently, it is not in banks' interests to do this as it incurs an additional tax burden. According to Hausner, there is also a need to create a system in Poland which would encourage the public to save money and the minister suggested the government should introduce a tax waiver on all long-term deposits. (www.biznes.onet.pl) M.M.