UPDATE 2-Moldovan parliament repeals law on 2016 bank rescue despite IMF concerns

(Adds repeal of Russian propaganda law)

CHISINAU, Dec 16 (Reuters) - Moldova’s parliament voted to repeal legislation on Wednesday that had allowed the finance ministry to issue bonds worth 13.5 billion Moldovan lei ($790 million) to prop up the financial system in 2016 after a massive banking scandal was uncovered.

The law was originally passed as a condition for IMF loans in 2016, and its repeal was criticised by a former prime minister as weakening the country’s creditworthiness.

Separately parliament also voted to scrap an IMF-backed move to raise the pension age for women from 57 to 63 years, and for men from 62 to 63 years.

Known locally as the “theft of the century”, the banking scandal saw the equivalent of an eighth of the country’s gross domestic product stolen from three banks that were taken under special administration by the central bank in November 2014.

Most of the stolen money has never been recovered.

Wednesday’s vote was passed by lawmakers from the Socialist party and the party of Ilan Shor, a businessman convicted of fraud and money-laundering in connection to the scandal. Shor denies wrongdoing and is pursuing an appeal against his conviction.

The vote comes a month after Maia Sandu, who favours closer ties to the European Union, won the presidential election against the pro-Moscow incumbent Igor Dodon, the former leader of the Socialist party.

Sandu is pushing for a snap parliamentary election and has accused lawmakers of passing legislation to try to sabotage her ability to govern.

Moldova had passed the law as a requirement for International Monetary Fund loans in 2016 under the then Prime Minister Pavel Filip. “The adoption of the law undermines the creditworthiness of Moldova, puts the National Bank at risk, a part of whose money put into circulation will be unsecured,” Filip said on Wednesday.

The IMF expressed concern ahead of the vote. The IMF’s country representative Rodgers Chawani warned “it could undermine efforts to improve the financial system of Moldova.”

Separately, parliament also passed legislation on Wednesday conferring more status on the Russian language in Moldova, obliging state institutions to respond in Russian to an oral or written request from citizens if it is made in Russian.

Parliament also overturned a 2018 law which prohibited the broadcast of Russian-made analytical, news and military television programs. ($1 = 17.0857 Moldovan lei) (Reporting by Alexander Tanas; writing by Matthias Williams, Editing by William Maclean)