Banks, allowed by the amended norms to give mortgage loans without doing a stress test

Romanian banks are permitted to grant mortgage loans without establishing a maximum degree of indebtedness and can do without a stress test assessing the foreign currency, interest and commission risks, the central bank's BNR amended lending rules published today in the Official Gazette stipulate.

BNR decided on January 15 to differentiate between consumer and mortgage loans in prudentiality and allow a higher degree of indebtedness of the latter, after adjusting lending norms.

Now banks are allowed to negotiate with their clients the level of indebtedness at each mortgage loans considering both the customers' payback capacity and their own financial resources.

However, restrictions introduced last summer in August through the stress test are kept and applied only for consumer credits.

Last year in October lending started to brake, some bankers arguing the main reason behind the slump is the new set of rules imposed by BNR in a bid to limit risks after lending boomed in Romania.

However, representatives of the central bank argued the real reason is the lack of resources at banks with the financial downturn settling in Romania.

Non-governmental credit stood at 195.131 billion lei at the end of November last year over the 193.06 billion lei a month before.

NewsIn