Banks raise the cost of loans

The cost of new loans for Romanians will rise by two-three percentage points, as a result of the introduction of regulations by the National Consumer Protection Authority (ANPC), probably as of 1 January 2009, which prohibit banks and non-banking financial institutions (NBFI) from raising commissions for the duration of a loan, say financial analysts.

“Because they will no longer be able to raise commissions, banks will proceed to increase interest on loans, because they must cover the risk connected with changed conditions on the market. Banking operational costs will rise 0.2-0.3 percent, which will either be included in the cost of loans, at 2-3 percent, or to a drop in profit posted by banks,” according to a declaration for Business Standard Dragos Cabat, President of the Association of Financial Analysts.