Bulgarian State Companies with New Orders for Bank SelectionFinance | August 7, 2010, Saturday // 11:47| views
Bulgaria’s Finance Minister, Simeon Djankov, is instructing State companies to select bank services based on their cost effectiveness. Photo by BGNES
Bulgaria’s Finance Ministry and Minister, Simeon Djankov, are ready with directions for State companies for the selection of banks to serve their accounts.
The Directions for Applying Good Practices in the Selection of an Executor of Financial Services are valid for companies entirely owned by the State, for those where 50% of the shares are controlled by it, and for their affiliates.
The instructions will become effective after the current contracts of the above with banks and financial institutions expire. In case the contracts are termless, the companies must send a 6-month notice that they will be annulled and a competition for new agreements will be held.
State companies are mandated to include in their rules and regulations a section for the ways and the criteria to choose a financial institution and to submit them to the Finance Ministry. The companies must further report on their compliance with the directions after each quarter and at the end of the fiscal year. The document, however, does not provide for sanctions if the mandate remains unfulfilled.
The companies will have to select the most cost effective from at least 3 offers while assessment of the banks will be based on their image, credit rating, interest rates, fees and commissions.
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