Romanian central bank makes counter-proposal to interest rate ceiling draft law

Romania’s National Bank (BNR) is opposing the current draft law on ceiling interest rates for loans. The draft law proposes limiting interest rates to 2.5 times the monetary policy rate for mortgage loans – which would mean 5.6% maximum at current values – and 18% for consumer loans. These would apply to ongoing loan contracts as well. BNR had initially said it would not make any comments on the draft law as it wouldn’t have targeted loans by banks and non-banking financial institutions. But it issued the new opinion in the form of a letter, signed by BNR Governor Mugur Isarescu, that was sent to the Chamber of Deputies, where the draft law is currently under debate, local Profit.ro reported. The BNR has made a counter-proposal, which includes specific multipliers for interest rates for different types of loans, based on how other countries have implemented the interest rate ceiling. It also advised applying the new rules only to new loans. Thus, BNR’s proposal would minimally affect banks, while impacting non-banking financial institutions which grant short-term loans. editor@romania-insider.com