Many banks fail test of lending norms

The Supervisory Authority of the NBR (National Bank of Romania) has identified no less than 20 different faults in the lending norms for individuals, which have so far been sent by around 14 banks for the NBR’s approval. The Authority has asked many of the papers to be redrafted extending the process and delaying the emergence of new credits, with separate client categories and more relaxed conditions, onto the market. The liberalisation of lending conditions proves to be more complicated in meeting the strict rules and norms than initially expected. The NBR identified a lack of basic elements for minimising risks, such as the lack of scoring systems; a classification of the target clients based on the risk of non-repayment, or clearly defined criteria for client eligibility for each type of loan. Additionally, not all of the banks gave details of the subsistence expenditures or managed to set minimum levels therefor. The NBR also identified that several banks did not categorise client profiles (eligible income categories) and did not set an indebtedness level based on the client profiles, preferring to categorise individuals on different types of credit, an approach that NBR does not agree with.