Banks’ objections to RO loan repayment moratorium ignored


The amendments proposed by the Romanian banks to the government’s plan regarding the 9-month moratorium on bank loans have been completely ignored, according to based on documents from the Romanian Association of Banks (ARB).

The government order providing for a moratorium to which legal and natural persons with financial problems can apply was already approved last week.

In fact, the ARB has argued strongly against a new moratorium, as long as the European Commission does not include such a solution as part of the crisis management but rather suggests individual solutions designed by banks for their customers.

But if implemented, the amendments should solve several problems, the bankers argued. If 15% of borrowers took advantage of the moratorium, as was the case with the previous moratorium after the Covid-19 lockdown, banks would not face liquidity problems, but currency and maturity mismatches could increase , said the National Bank of Romania (BNR) commented on the government’s draft moratorium.

An additional issue for banks is that, unlike last time in 2020, there is no waiver of provisions for loans subject to the moratorium.

“The impact of the new moratoria on the indicators of asset quality and solvency of credit institutions will be strongly influenced by the accounting treatment that will be applied to loans benefiting from the new moratoriums”, specified the BNR.

Debtors who relied on the past moratorium are those with the highest risk, the data cited by the BNR shows.

Firms that used moratoriums generated a non-performing loan rate of 14%, compared to 4.2% for those that did not use such facilities, according to BNR data.

In the case of the population, the rate of non-performing loans for those who requested the suspension of rates is 9%, against 3% for those who did not request the facility.

(Photo: Kittichai Boonpong / Dreamstime)


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