NBR: 40% debt cap only under certain conditions

The National Bank has warned banks that the new upper indebtedness level for a client, set at 40% of eligible incomes until the internal credit norms of each bank are approved, can only be adopted under certain conditions. Therefore, the banks that previously applied upper indebtedness levels of less than 40% through their old internal norms can only move to the new upper level, on condition that those norms be in line with new regulations issued by the NBR (National Bank of Romania) last month. It is about clearly defining what income categories the banks see as eligible. Adjustment indexes should also be established, based on the degree of certainty of the incomes and on whether the incomes are permanent or not, on the expense categories, which are deducted from eligible incomes, in order to determine the total indebtedness level and on the existence of a methodology to regularly reconsider the income adjustment indexes.