CEC to limit access to credits in foreign currency

CEC (The Romanian Savings Bank) will focus on granting funding in RON for individual clients, especially after recent exchange rate volatility has indicated that foreign currency loans can cause problems, according to Radu Ghetea, chairman of the bank. As a result, CEC will soon adopt a new “approach” when it comes to its lending policy, according to which clients will only be able to access loans in a currency other than the currency in which they receive their incomes if their indebtedness level is low. “It is risky for a client with low income to have a high indebtedness level of 70% of their available income, because they are highly exposed to the foreign-exchange risk,” explained Ghetea, in an interview with ZF. The bank has surplus RON reserves, after it attracted a large amount of deposits from its clients. That being the case, CEC does not feel the need to attract funding in foreign currency. Anyway, it would be hard for the state-owned bank to compete with other players, which have strong foreign shareholders behind them and are able to provide cheap funding in foreign currency, Ghetea admits.