Banks ask Romanian Parliament for debate on new draft bills

The Romanian Banks Association (ARB) and the Banking Employers’ Council (CPBR) have asked the Parliament to extend the consultation period for the three draft bills that aim to introduce new rules on the local banking market. The three bills, which have been initiated by liberal senator Daniel Zamfir, aim to cap the interest rates banks can charge their clients and the sums that debt recovery firms can recover from bad-paying clients, and to remove the enforceability of lending contracts. The bankers are worried that these bills will have mainly negative effects on the local consumers and economy. According to a study by KPMG Advisory, the three bills would determine banks to reduce lending, which would determine a decline in domestic consumption and increase the pressure on the local real estate market. Another effect would be the increase in the non-performing loans on the local banks’ balance sheets as lender wouldn’t be able to sell these loans anymore. This would lead to lower bank profits and lower resources for new loans. According to KPMG, a potential 5% decline in retail lending would determine a 1.8% drop in the gross domestic product (GDP). editor@romania-insider.com