Bancherul - BANCI / ENGLISH / Competition Council: refinanced credits doubled

Every year, the Romanian Competition Council, lead by its president, Bogdan Chiritoiu (foto) launches a public debate on the report of the competition in certain sensible economic sectors, it said in a press release.

This year, the report analyses three fields: the banking sector, the pharmaceutical sector and public procurements because their importance and fluctuation can affect significantly the overall evolution of the national economy.

For the first time, the report includes a distinct chapter presenting several competition assessment indicators intended to be applied in certain sectors. This chapter aims to summarise the results of a project carried out by the competition authority for the past two years.

The impact of the revision of the early reimbursement fee over the credits

As regards the banking field, the report analyses the impact of the revision of early reimbursement fee over the credits, according to the Emergency Government Ordinance no.50/2010 on consumer credit contracts (hereinafter Ordinance).

The aim of introducing the provisions on the elimination/reduction of the early reimbursement fee for all consumer credits (natural persons) has been the fairly increase of competition between banks, as a result of the increased inter-bank client mobility.

An important indicator for assessing the achievement of this objective
has been concretised in the evolution of the refinancing activity within the Romanian banking system.

After the adoption of the Ordinance (June 2010 – May 2011), the total number of the refinanced credits has doubled compared to the previous period (June 2009 – May 2010).

In this period, around 160,000 refinancing credits have been granted, compared to 85.5 thousands refinancing credits granted during June 2009 – May 2010. As a result, at least 160,000 clients have benefited directly from the elimination/reduction of the early reimbursement fee.

The clients which have early reimbursed their credits partially
(229,000 clients) or totally (other than the refinancing credits), have also benefited from these conditions, together with those which have renegotiated their contracts so as to benefit from more favourable conditions.

The cumulated volume of the refinancing credits granted in RON during June 2009 – May 2010 is of RON 1,027 million, and the one granted during June 2010 – May 2011 is of RON 2,169 million. By comparison, the volume of consumers’ credits remaining to be reimbursed at the moment May 2011 has been of RON 35,402 million.

Consequently, during the 12 months after the adoption of the Ordinance, the total volume of the refinancing credits has doubled compared to the corresponding previous period. At the same time, this volume is 6% of the volume of consumers’ credits remaining to be
reimbursed.