Loading ...The enforcement of the new credit requirements is expected to bring about the halving of crediting, leaving out many loan applicants that no longer qualify.
The new requirements favour the people on very high incomes from urban areas. For people earning between RON 2,000 and 3,000 a month, the monthly indebtedness rate is limited at below 50%.
The new requirements favour the people on very high incomes from urban areas. For people earning between RON 2,000 and 3,000 a month, the monthly indebtedness rate is limited at below 50%.
The National Bank of Romania (BNR) modified this August the regulation for crediting individual loan applicants, and most of the banks are now working to win approval for their own updated versions of credit requirements or are implementing some. So far, UniCredit, Banca Comerciala Romana (BCR), Banca Romana pentru Dezvoltare (BRD), Volksbank, Intesa Sanpaolo and Bank Leumi have announced they are implementing the new rules or have even finalised implementing them.
Bankers say BNR has imposed almost uniform market requirements and left too small a room for differences that would match the approaches of each player, and the rules recommended are very conservative. Moreover, some players say that under the new conditions restricting the financing sources the norm approved by BNR seem too generous by comparison, so they will be granting loans against even stricter requirements. Some banks have discarded forex loans all together, at least for some time.
As the new rules stand, banks will divide their clients according to creditworthiness, while the indebtedness rate may fluctuate widely according to differing conditions.
In some instances, the credit requirements have become so tough that clients no longer qualify for loans. For instance, a retail client on a monthly income of RON 6,000 who was already paying back older loans of monthly instalments in excess of RON 1,000 would still qualify for an additional RON 62,000 loan repayable in ten years.
In some instances, the credit requirements have become so tough that clients no longer qualify for loans. For instance, a retail client on a monthly income of RON 6,000 who was already paying back older loans of monthly instalments in excess of RON 1,000 would still qualify for an additional RON 62,000 loan repayable in ten years.
After the new updated requirements come into force, the same client will no longer qualify for any additional loan.
Given the new conditions, the relationship with the bank becomes one of the main criteria when credit is involved. Thus, clients with a history of cooperation with the bank are offered far better conditions than a new client. Moreover, unsecured personal loans are no longer available for new clients.
Given the new conditions, the relationship with the bank becomes one of the main criteria when credit is involved. Thus, clients with a history of cooperation with the bank are offered far better conditions than a new client. Moreover, unsecured personal loans are no longer available for new clients.
At the same time, the new rules require the banks to approach guarantees more conservatively.
Thus, any old client has to provide a mortgage as security that is worth 130% of the loan value. New clients will have to provide the security that covers 140% of the mortgage loan value contemplated.
Thus, any old client has to provide a mortgage as security that is worth 130% of the loan value. New clients will have to provide the security that covers 140% of the mortgage loan value contemplated.
The new credit requirements are said to be encouraging to those seeking short-term loans denominated in the local currency, the leu (RON), in which case the indebtedness is capped at 70%, the same as in the previous instances. Yet, these terms are offered only to premium clients, while other clients with worse risk profiles may not get indebted to the tune of more than 50% of their monthly revenues.
In the case of long-term loans denominated in euro, the banks are imposing much more restrictive requirements. Even the clients with an excellent risk profile may not get indebted more than 50% of their monthly revenues.
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