New lending norms as of August 28

New regulations regarding lending risk for credits granted to private customers will come into force on August 28 after being published in the Official Gazette at the end of last week. After being endorsed at an NBR Board of Governors meeting on July 8, publication of the guidelines was delayed due to banker dissatisfaction with the excessive amount of red tape they believed the norms would have generated and lack of clarity in certain areas. The current version of the guidelines included mortgage credits in the real estate investment credit category after banks requested the category be defined more clearly to allow people to understand the difference. At the same time lenders will treat refinancing loans as either consumer or real estate investment loans, depending on the nature of the loan. The current version of the norms also includes a paragraph on which the NBR agreed with the banks. It deals with the acceptance as personal guarantees of insurance policies against default risk bought either by the lender or the client. The norms also make lending terms stricter, setting a cap on all commitments (both principal and interest on all types of loans) of 40% of the monthly net income of the debtor including his or her family. ZF