(Adds IMF statement, details)
By Sabina Zawadzki
KIEV, July 24 (Reuters) - Ukraine raised its chances on Friday of receiving a $3.3 billion tranche from the International Monetary Fund soon after parliament passed a number of amendments to a banking law.
The IMF said the changes, aimed at making the management of ailing banks more efficient and effective, would go a long way towards stabilising Ukraine's financial sector, hit by a fragile currency and the country's descent into economic recession.
The changes, which include empowering temporary administrators of troubled banks and clarifying the procedure for recapitalisation, were passed by 322 of 450 deputies in the assembly, which sat in an extraordinary session.
"The reforms represent significant progress towards restoring financial stability because they provide a robust framework for resolving problem banks consistent with international good practices," the IMF said in a statement.
"The adoption of the reforms will help enhance confidence and promote the sustainable development of the banking sector, both of which are key in returning the Ukraine to a path of growth and prosperity."
Ukraine and the IMF agreed on a $16.4 billion standby programme last November and Kiev has already received over $7 billion, though lengthy talks over some IMF conditions have delayed the disbursement of some of the funds.
The IMF is due to decide on the third tranche in the coming weeks after a visiting mission earlier this month assessed Ukraine's progress and imposed conditions including changes to the banking law. [ID:nLA637721]
CHANGES
One of the main changes, according to the text of the bill, strengthens the powers of the temporary administrator placed in ailing banks, who can now make decisions to reorganise the bank together with the central bank and shareholders.
The central bank now has to announce immediately that it has taken a bank into temporary administration and can extend a six-month freeze on deposit withdrawals.
Another amendment makes the procedure for recapitalisation of banks more precise, listing a string of documents and studies that the central bank has to complete and submit to the government if it recommends a capital injection.
The IMF earlier this month did not say exactly what changes it required to the banking law, only that amendments should "give the necessary instruments and tools for effective programmes to strengthen the banking system".
Its statement on Friday did not say if Ukraine has now fulfilled all the conditions for the next tranche or when the IMF's board would decide whether to disburse it.
So far, 17 banks of over 180 have been placed in temporary administration, the largest of which is the country's 10th, Nadra Bank, and the rest relatively small. The government has decided to inject $1.26 billion into the capital of three banks. (Additional reporting by Emily Kaiser in Washington; Editing by Ron Askew)