When it comes to loans, banks never overlook their own employees, especially since they are more credible than just any other customers. Under the circumstances, the loan fever has spread from the non-banking clients to the banks’ employees.
Several banks have been lobbying, directly or indirectly, for higher “internal credit” limits and seem to have convinced the National Bank of Romania (NBR) to increase up to 30% the total amount of net loans a bank can grant to its employees (natural persons) or their families.
Consequently, whereas loans to banking employees could not exceed 5% of the bank’s own funds so far, this level has now climbed to 6.5%. Own funds are rarely made public by bankers, but it is certain now that banks have more money to lend to their staff.
“The Romanian Banks Association (ARB) has not put any pressure on the National Bank, as far as this matter is concerned. This increase shows the National Bank has concluded that the banks are being cautious with loans. At any rate, granting preferential loans to employees is being done worldwide. The best clients of a bank are, eventually, its own employees,” ARB chairman Radu Ghetea said.
Granting loans to their own employees, mostly under preferential conditions, such as interests below the market level or minimum warranties, has always been used by banks as an incentive or as part of the salary package. Some banks are giving credits in foreign currencies to their employees, with 4% – 6% interests.
“I find it normal, as long as preferential conditions are used in many branches of the economy for those working in the respective fields. For instance, those working for dealers or producers of household appliances get significant discounts if they want to purchase such products,” Ghetea also said.