MOSCOW, December 31. /TASS/. Russian President Vladimir Putin signed a law on syndicated lending. The relevant document was published on the website of legal information on Sunday.
The law that was adopted by the State Duma, lower house of parliament, on December 20 and by the Federation Council, upper house of parliament, on December 26.
A syndicated loan is granted to a borrower by several creditors.
The essence of the law is to introduce into the Russian legal documents the concept of a "syndicated loan".
Under this law, agreements will be concluded between creditors that will be unequivocally interpreted, including by the judiciary, Anatoly Aksakov, head of the State Duma committee for the financial market, said earlier.
Currently, due to the fact that there is no concept of "syndicated loan" in the Russian legislation, most transactions are concluded on the basis of foreign legislation.
According to the law, a syndicate may include Russian and foreign banks, the Bank of Russia, Vnesheconombank, international financial institutions and foreign legal entities that are legally entitled to extend loans. All these organizations (except for the Bank of Russia) will be entitled to exercise the functions of a credit manager.
Using syndicated lending will increase the size and timing of borrowing, reduce transaction costs and time to close the transaction. From the borrower's point of view, this tool enables creditors to share credit risks and to diversify the portfolio of an individual bank.
The new law is expected to come into force on February 1, 2018.