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GM Corporate and
Fiduciary Services Ltd.
147/1, St. Lucia Street,
Valletta VLT 1185, Malta.
+(356) 2123 5341
info@gmint.com
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NEWS & EVENTS
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After months of negotiations between the European Commission and the Maltese Government, the Commission has found Malta's plans for setting up a development bank to be in line with EU state aid rules and thus has approved Malta’s proposal to set up the Malta Development Bank (MDB).

 

The bank will carry out non-commercial activities to finance small to medium sized enterprises (SMEs) and to support infrastructure projects. The MDB will mainly step in when private commercial banks fail to make appropriate financing available or if financing is not offered at normal market rates. Initially, the Bank will operate through guarantee schemes provided to the main commercial banks and according to its statute, it will only finance commercially viable projects. The bank will also be eligible to participate in EU financial instruments, such as COSME (EU program for SMEs), Horizon 2020 or the European Fund for Strategic Investments (EFSI), which aims to support strategic investments in key areas throughout the European Union.

 

The Commission’s approval does not come free from obligations. To the contrary, the approval comes with a list of agreed parameters for the bank’s operation, including compliance with various rules related to state aid and the General Block Exemption Regulation. The decision also specifies the financing envelopes for the bank for the first three years of operation, following which these will be reviewed in light of developments.

 

The bank will be 100% owned by the Maltese Government and will have a guarantee from the same on both assets and liabilities, to the extent negotiated and agreed upon by the MDB with the Ministry of Finance. The bank will be a non-profit institution and an unregulated financial institution with a supervisory board monitoring its operations.

 

It is believed that the introduction of this bank would enhance Malta’s financing structure and contribute to the country’s economic growth. 

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