Romanian banks receive motivation for EUR 710 mln fine set by competition body

Several banks, including market leader Banca Transilvania, have announced plans to appeal. Raiffeisen said the documents it received did not contain evidence beyond that already made public, according to Cursdeguvernare.ro.

The banks have 60 days from receiving the final decision and its reasoning to submit plans of measures aimed at eliminating the alleged anti-competitive practices. The plans will be subject to approval by the Competition Council.

Separately, the Social Democratic Party (PSD), through MP Daniel Zamfir, and Save Romania Union (USR), through MP Alexandru Dimitriu, have drafted bills aimed at allowing bank customers to recover additional interest allegedly paid on their loans as a result of the alleged ROBOR manipulation. The PSD bill would require banks to initiate procedures for paying compensation, while the USR bill would establish procedures through which customers could seek compensation.

Officials of the National Bank of Romania (BNR) have warned about the potential negative impact of such legislation, noting that the bills were drafted before the Competition Council published the reasoning for its decision and before the courts rule on appeals by the banks.

The Competition Council’s decision can be challenged before the Bucharest Court of Appeal within 30 days of the communication of the reasoning to the banks.

The decision also calls for fundamental changes to BNR regulations governing the functioning of the government securities market, including procedures for setting benchmark and fixing rates, as well as the interbank money market and the establishment of ROBOR.

The Competition Council argued that banks should not be able to see other banks’ quotations before the benchmark rates are established, in order to ensure genuine competition.

The BNR has been given two months to make the required changes. If it fails to do so, Parliament could intervene and amend the legislation governing the central bank. Moreover, the ten banks currently participating in the establishment of ROBOR would no longer be allowed to participate in the market if the BNR does not amend the two regulations within the two-month deadline.

The banks that have commented on the decision said they plan to challenge it, arguing that they fully complied with the rules in force at the time of the alleged conduct.

“Banca Transilvania will initiate all available and necessary steps to vigorously defend its position, at all procedural stages, to the maximum of the rights granted by law and believes that the veracity and solidity of its arguments will weigh in before the competent institutions and courts,” Romania’s largest bank by assets said.