National Bank of Moldova publishes draft amendments to banks’ governance framework on board diversity, training and risk oversight

The National Bank of Moldova published a draft Executive Committee decision amending its regulation on banks’ governance framework, updating requirements for management bodies, specialised committees and internal control functions. The draft also introduces new provisions on board diversity, induction and ongoing training, conflict-of-interest management and gender-neutral remuneration, alongside targeted changes affecting credit risk governance, including the use of technology-enabled credit processes. Key changes include new definitions (including “diversity”, “induction”, “training”, “gender-neutral remuneration policy”, “funding risk” and “significant risk”) and terminology updates replacing “audit company” with “audit entity”. Management body members would be required to dedicate sufficient time to their role, assessed against criteria such as concurrent mandates, travel and meeting commitments, external activities and time needed for induction and training. The bank’s board would take on additional duties covering oversight of internal control independence, approval and oversight of diversity and induction/training policies, monitoring of executive decision-making and ongoing monitoring of the bank’s risk culture. Committee governance is tightened through expectations for periodic rotation of committee chairs and members and requirements for open and critical discussion. For the risk management committee, the draft sets expectations on access to information including AML/CTF-related information, the ability to involve internal control and other functions or obtain external expertise, and chair independence, including a prohibition on the chair also chairing the board or another committee. The draft adds staff non-discrimination and reintegration policies following maternity, paternity or childcare leave, expands conflict-of-interest rules to cover close family interests and past relationships, and requires abstention from voting where a conflict may compromise objectivity. Banks would also need succession planning for management body members and key function holders, and each management body member would have to complete at least 60 academic hours of external training annually, with induction completed before submission for National Bank of Moldova approval. The draft further adds controls for technology-based credit innovations, including model governance, traceability, data quality and ongoing performance monitoring, and introduces requirements for prudent collateral valuation policies including criteria for using advanced statistical models. It also revises a provision covering the treatment of the bank’s credit and finance-lease borrowers and their direct or indirect owners and beneficial owners, with exclusions for smaller exposures up to MDL 400,000 for individuals and up to MDL 1,000,000 for legal entities and certain other borrowers. The amendments would enter into force five months after publication in the Official Gazette of the Republic of Moldova.