OREANDA-NEWS. January 10, 2013. Proposals to give Belarus’ new Development Bank an expansionary mandate could further weaken control over Lending under Government Programs. The IMF Executive Board made a statement to this effect while finalizing the discussion of the third post-programme monitoring mission to Belarus.

Directors took the view that the recently established Development Bank should take charge of all government directed lending, thus allowing commercial banks to operate on market terms and improve credit allocation in the economy. The Development Bank would also need to be transparently funded from the budget and prevented from issuing its own debt.

Directors welcomed the planned reduction of lending under government programs (LGP) funded from government deposits, but stressed that other forms of LGP also should be cut to curb overheating and the buildup of contingent liabilities.

The Development Bank was established on June 21, 2011 after Belarusian President Alexander Lukashenko signed ordinance #261 to create open joint-stock company Bank of Development of the Republic of Belarus.

The Development Bank is Belarus’ agent bank to service and repay state loans and external loans attracted against a government security and extended to finance projects included in state programs.

The creation of the Development Bank and introduction of the special investment mechanism will increase the efficiency of projects included in state programs and reduce costs and timeframes. End

The bank’s statutory capital stood at Br20 billion (USD 2.3 million) as of January 1, 2012.