SIMILAR ARTICLES

Ford is looking for 1,700 employees to produce EcoSport SUV model

The representatives of Ford Craiova met on Wednesday with mayors of 30 localities from Dolj county in order to stimulate the attraction of 1,700 new… Mai mult

Sovereign Fund gets legal base. Details announced by Minister Teodorovici

The Government adopted on Thursday the ordinance that provides for the general framework for the establishment of a Sovereign Fund. Later, after new talks with… Mai mult

Development strategy / Government squeezes even investment money from its own companies: EUR 120 million from only two entities in energy field

Nuclearelectrica (SNN) and Romgaz (SNG) have calculated the additional dividends to be paid to the state after the Ministry of Finance (MFP) sent to the… Mai mult

Illegal state aid / European Commission demands Romania to recover EUR 60 million from CE Hunedoara

Romania has to recover illegal state aid worth EUR 60 million granted to Compexul Energetic Hunedoara, announced the European Commission with a statement released on… Mai mult

DNA, officially: Senate President is suspected of having received a USD 800,000 bribe. Case file opened at a request from Austrian judicial authorities

The case file in which the DNA requested the waiving of the Senate President’s immunity was opened at the request of Austrian judicial authorities and… Mai mult

Cronicile

National Bank of Romania caps maximum indebtedness at 40% of net income for loans in RON

de Adrian N Ionescu , 22.10.2018

BNR Board of Directors has adopted the new lending terms for individuals, according to which the maximum level of indebtedness will be 40% of the net income for loans in RON and 20% for loans in foreign currency, regardless of their destination.

Total indebtedness is determined as the proportion of total monthly payment obligations relative to the monthly net income, according to a release of the central bank, issued on Wednesday night.

The maximum indebtedness rate is increased by 5 percentage points for loans relating to the purchase of the first home to be inhabited by the borrower. The regulation applies to both banking institutions and IFNs.

Thresholds are not applicable to refinancing.

All credit requests made prior to January 1, 2019, including those related to some government programs addressed to individual clients such as First Home program, are settled based on the regulation in place at the time when the request was submitted to the bank, even if the loan is granted after 1 January 2019.

Impact

Indebtedness levels allowed are much tougher than those practiced by banks (70%) and even more severe than the previously analysed version for the real estate credit: 55% for the fixed interest loans in RON and 45% for the variable interest loans.

The threshold is more permissive for consumer credit compared to the previous version (30% and 25% respectively, for variable interest loans).

BNR, therefore, considers that the decision will have an insignificant impact on the economic growth and gives an example regarding the level of maximum instalments incurred by borrowers:

*

  • Maximum monthly instalment (RON)
  • Until December 31, 2018        After January 1, 2019
  • An individual with a net income of 30,000 RON
  • Household including two adults and two children with net monthly incomes totalling 5,000 RON (around the national average)
  • Individual indebtedness (per cents)
  • Until December 31, 2018        After January 1, 2019
  • Real estate      (market average)        (45% for the first home)
  • Consumption   (market average)

*

The new regulation adds “facilities for the sustainable growth of the lending activity to the population:

  • more permissive rules for purchasing the first home to be inhabited by the borrower,
  • non-application of the indebtedness limit for a maximum of 15% of the portfolio of new loans for individuals, at the level of each creditor,
  • reduction of bank bureaucracy in granting loans”.

The National Bank of Romania has repeatedly expressed its concern about the indebtedness of the population, especially in the case of people with the lowest incomes, who had an average indebtedness of 53%, compared to 20% in the case of debtors who earn more than twice the average national wage.

The central bank did not intervene on the indebtedness after 2007 after it set clear debt thresholds in 2004: 30% for consumer loans and 35% for real estate loans, as well as a minimum level of the advance for real estate loans at 25%.

BNR removed the direct limitation on the indebtedness and advance payments that were to be set by each bank under the risk rules and the bank’s management subsequently justified the measure with the need to liberalize the capital movement in line with the rules of the EU membership.

Then the crisis followed.

Mergeți în homepage ›

Publicat la data de 22.10.2018

Lăsați un comentariu


NEWS

Sovereign Fund gets legal base. Details announced by Minister Teodorovici

The Government adopted on Thursday the ordinance that provides for the general framework for the establishment of a Sovereign Fund. Later, after new talks with… Mai mult

Ford is looking for 1,700 employees to produce EcoSport SUV model

The representatives of Ford Craiova met on Wednesday with mayors of 30 localities from Dolj county in order to stimulate the attraction of 1,700 new… Mai mult

Development strategy / Government squeezes even investment money from its own companies: EUR 120 million from only two entities in energy field

Nuclearelectrica (SNN) and Romgaz (SNG) have calculated the additional dividends to be paid to the state after the Ministry of Finance (MFP) sent to the… Mai mult

DNA, officially: Senate President is suspected of having received a USD 800,000 bribe. Case file opened at a request from Austrian judicial authorities

The case file in which the DNA requested the waiving of the Senate President’s immunity was opened at the request of Austrian judicial authorities and… Mai mult

Illegal state aid / European Commission demands Romania to recover EUR 60 million from CE Hunedoara

Romania has to recover illegal state aid worth EUR 60 million granted to Compexul Energetic Hunedoara, announced the European Commission with a statement released on… Mai mult

Ministry of Finance planned loans of RON 4.74 billion in November. Costs are increasing

The Ministry of Public Finance (MFP) intends to borrow in November RON 4.74 billion, 1.4% more than in the previous month, according to the Ministry.… Mai mult

New 100% Romanian tractor has been launched. Features, endowments, price

IRUM Reghin launched the first 100% Romanian tractor, announced Digi24, designed and built by the company’s engineers, 15 years after the Romanian tractor manufacturing disappeared.… Mai mult

Romanians from abroad sent as much money to Romania as Government attracted from European funds and subsidies

Romanians working abroad sent EUR 2.695 billion to the country in the first eight months of 2018, equalling the European funds and subsidies received in… Mai mult

Bucharest Stock Exchange: European record increase of reference index, old liquidity issues

The main index of the Bucharest Stock Exchange (BVB), BET, registered the second highest increase in the European Union (8.5%) in the first nine months… Mai mult

Estimates of Capital Economics: GDP is losing speed in Q3 as well, growth could be reduced to 3.5%

The first estimate of the economic growth in Romania in the third quarter shows a reduction down to 3.5% (year-on-year), after the previous quarter's Gross… Mai mult

Mugur Isarescu - BNR: Wages should increase by market forces not by politicians

Wage increases should be based solely on productivity growth and be made "by market force", not by politicians, the Governor of the National Bank of… Mai mult

OMV postpones decision to assume an investment in natural gas from Black Sea for next year

Austrian OMV Group postponed its decision on the Black Sea investment for next year, in the context of the offshore law adoption being postponed, Reuters… Mai mult

Justice Minister initiated procedure for dismissing General Prosecutor

Minister of Justice announced on Wednesday that asks for the dismissal of General Prosecutor Augustin Lazar (photo) for 20 reasons (they could be more, Tudorel… Mai mult

Eurobarometer / Romanians who believe that EU membership is a good thing have lost majority position

  The last Eurobarometer of the European Parliament, published in September, shows that 49% of Romanians consider that EU membership is a good thing. Compared… Mai mult