Czech lenders agreed to contribute part of their net incomes to a national development fund that the Czech Republic plans to set up to help finance public investment projects, Bloomberg News reported May 20.

Czech Prime Minister Andrej Babiš wants the country's four largest lenders — KBC Group NV unit Československá obchodní banka a.s., Erste Group Bank AG unit Česká spořitelna a.s., Société Générale SA unit Komerční banka a. s. and UniCredit SpA unit UniCredit Bank Czech Republic and Slovakia a.s. — to jointly contribute 6 billion Czech koruny to the new fund in 2020, with other lenders operating in the Czech Republic to join after the government and the main banks have discussed all the details regarding the fund.

The proposed contribution mechanism is expected to be introduced instead of a bank asset tax proposed earlier by the governing coalition's junior party ČSSD, which would be a much more costly option for the Czech Republic's mostly foreign-owned banking industry, the newswire noted.

The Czech Banking Association called Prime Minister Babiš's fund contributions proposal a "much more progressive and innovative" measure than additional taxation and called for its adoption "as soon as possible." Česká spořitelna CEO Tomáš Salomon told Bloomberg in an emailed statement that he welcomed the preliminary agreement on creating the fund, noting that Czech banks were "ready to invest billions of koruna" in the fund and hoping that other large companies would also contribute.

As of May 17, US$1 was equivalent to 23.08 Czech koruny.