Bulgaria's ruling majority has passed the bill setting up a Bulgarian Development Bank (BDB), but drew criticism from the opposition, who warned that the Cabinet is trying to make the the new lender the sole administrator European Union aid.

Members of Parliament from the rightist party Democrats for Strong Bulgaria (DSB) were the most vocal in their criticism, saying that the lender, which will inherit the assets of the state-run Encouragement Bank, will act as the sole administrator of funds from the European Regional Fund, the European Social Fund and the Cohesion Fund, as well as as the coordinator of public bids on development, services and supplies.

That meant that BDB would enjoy the exclusive right to operate with funds of up to five billion euro, DSB said. The creation of the bank has already been criticised as a belated measure that would create even more room for corruption in the country.

DSB has requested a meeting with the head of the Association of Commercial Banks Levon Hampartzoumian to brief him on the fact that the BDB would distort competition on the banking market, in particular, private banks will be stripped of the right to apply and manage EU resources.

Hampartzoumian is yet to familiarise with the letter of the party and to come up with a public statement, the press office of UniCredit Bulbank said. Hampartzoumian is the chief executive of UniCredit Bulbank, the biggest lender by assets in the country.

The purpose of BDB, as outlined in the government ordinance stipulating its creation, is to improve, encourage and develop the overall economic, export and innovation potential of small and medium enterprises in Bulgaria, as well as to encourage their access to financing.

The new bank is also intended to re-finance local commercial banks borrowing funds to small and medium enterprises, as well as foreign banks acting as lenders of buyers of Bulgarian SME-made goods and services.