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Romanian Central Bank Board approved regulation on household loans

The Board of the National Bank of Romania (BNR) in the meeting on Friday approved the regulation on household loans, shows a press release of the central bank.

The regulation imposes the crediting institutions to define more exacting criteria for granting consumer loans in foreign exchange, but it does not affect - compared with the current conditions - the access to the foreign currency loans for which both the destination and the corresponding guarantees are property related, BNR points out.

According to BNR, this regulation improves the clients' information and warning mechanism concerning the risks involved by the loans in foreign exchange and the consequences of the currency and interest risks.

'The regulation aims at balancing the new loans granting in national currency as compared with those in foreign currency, which will contribute to the strengthening of the financial stability and to the proactive insurance of the capacity of debtors who uncovered to currency risk of honouring their reimbursement obligations for the contracted loans. The risks that foreign currency loans granting to debtors unprotected toward the currency risk involved both for them, as well as for the lending commercial banks are aimed to be accurately reflected in the prices of the financial services,' BNR mentions.

According to the cited release, the regulation is in line with the principles widely accepted in the European Union on foreign exchange crediting and reflected in the recommendations of the European Committee on Systemic Risk released on September 21, 2011. It has been submitted to public debate and has taken into account proposals of the finance-banking system sent through professional associations.

The Romanian Banks Association (ARB) sent BNR 60 proposals for the new regulation on household loans, out of which 33 have been technically approved.

According to the regulation draft on household loans launched for debate in September, the granting period for consumer loans is to be reduced at 5 years. Moreover, the applicants for such loans should have real or personal guarantees covering 133 percent of the loan value.

At that time, BNR proposed banks that when calculating the eligible income to take into account the application of some weighting percentage, depending on the currency in which the client wanted the loan. Therefore, for euros, banks should adjust the incomes by 35.5 percent, for Swiss francs, by 52.6 percent, for dollars, by 40.9 percent, and for the other currencies to use the value corresponding to the Swiss franc.

The regulation also stipulates the application of an income weighing percentage of 0.6 percent to cover the interest fluctuation risk and of 6 percent for interest fluctuations, regardless of the currency of the loan,Agerpres informs.

Sursa: http://www.actmedia.eu

Tags: loans currency percent foreign bnr household approved regulation