Romanian Banks To Apply New Foreign Currency Loan Provisions

However, 18 non-banking financial institutions did not send the new norms to be approved by the Romanian central bank, Cinteza said.

"All banks sent the new provision norms to be approved and they will use the norms in the transmitted form until they receive approval. If we have objections, the changes will be applied by the banks starting with the next month. There are, however, 18 non-banking financial institutions (NFI) that have yet to submit the norms before the deadline," Cinteza  told MEDIAFAX.

Cinteza said that the 18 NFIs would be checked, and they would be banned from issuing loans until the situation is mended. The new norms for classification and provisions were due submission to the central bank before March 26.

The new provisions are applicable exclusively for the NFIs registered with the Special Registry opened at the central bank, which contains 46 companies.

The central bank decided, in February, to add two percentage points to the provisions for loans in foreign currency granted to clients exposed to currency risks, fitting within the category "standard," and three percentage points for loans fm the categories "under observation," "substandard" and "doubtful."

Thus, for standard loans the provision represents 7% of the value, 8% for loans under observation, 23% for substandard loans and 53% for doubtful loans.

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