Ctrl Bk To Decide On Amending Household Lending Rules Next Wk

Representatives of the central bank and of Romanian Bank Association ARB met Friday to discuss the proposed changes to household lending rules.

The quoted sources did not say what were the central bank’s proposals, but said that a rule easing could be adopted for mortgage lending.

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Late 2008, ARB president, Radu Gratian Ghetea, said Romanian lenders will ask the central bank to amend the household lending rules, as they have blocked mortgage lending.

Romanian private lending rose 38.3% on the year in November in real terms to 195.131 billion lei (EUR1=RON4.2127), and increased by 0.7% in real terms on a monthly basis, according to the central bank data.

The private lending growth rhythm slowed down in November, from 44.8% (or 38.4% in real terms) on the year in October.

The annual private lending growth in November was driven by a 29% (20.9% in real terms) increase in local currency lending and a 46.5% increase in foreign currency lending.

Analysts predict a lending decrease also in December.

According to the new lending norms, for debt ceiling calculation, banks should consider only incomes of up to 20% higher than those stated with fiscal authorities in the previous year, and applications will no longer be based only on income certificates issued by employers as up to now, but also on annual fiscal statements.

Also, the maximum monthly installment an individual can afford to pay back on a loan will not be changed until the loan matures, according to regulation.

For banks that don’t have their own lending norms, the debt ceiling will be lowered to 35% from a previous 40% of the client’s income.