Romania’s National Bank (BNR) is expected to decide next week changes to the regulation local banks must follow when lending to individual clients.

The central bank will set a maximum indebtedness limit, for the first time since 2007. The threshold will be applied starting January 1, 2019.

The limits will differ based on the loan’s currency regardless of the loan type (mortgage or consumption).

BNR will adopt this project as lending to individuals has increased strongly in recent years, reaching a signal threshold. The maximum indebtedness degree, which stands for how much of the debtor’s monthly revenues should go on loan instalments, will be set at 40% for loans in local currency (RON), for those who have other loans, and 45% for those who take their first loan. The threshold for loans in euro will be lower, probably 20%, but the actual level is still under discussion, sources told Profit.ro.

Local banks will have some flexibility as they will be allowed to accept a higher indebtedness degree for clients with high revenues. However, the loans granted in special conditions should not account for more than 15% of their whole loan portfolios.

editor@romania-insider.com