The deal by which the Government allowed Casa de Economii si Consemnatiuni (Romanian Savings Bank - CEC) to grant loans to state-owned companies such as the National Housing Agency (ANL) and the National Investment Company (CNI), worth 6,500bn ROL (162 million euros) is harshly criticised by bankers, constructors and parliamentary opposition leaders.
They feel such loans are in serious breach of the banking law (the CEC was allowed to lend beyond the cap set by this law), a distortion of competition and a lack of transparency in funding public projects by not organising tenders. Furthermore, the opposition representatives say the Government is misleading the IMF and turning CEC into PSD's (Social Democrat Party) main creditor and demand the ordinance regulating those loans to be abrogated.
On the other hand, PSD and CEC's president Constantin Teculescu are in favour of this deal saying the funds will be used for public utility projects such as homes for young people and gyms.
Still, bankers are saying that considering the interest ANL and CNI will be paying, which is equal to the interest on the market, the State actually gains nothing. Moreover, the exception made in CEC's case, which will therefore exceed the cap per debtor (no more than 20% of the bank's own funds), is in breach of both the banking legislation and fair competition. The ordinance regulating this transaction stipulates CEC may allocate these funds as an exception from the banking law.
"Any administrative step affects us, because there is a possibility for the funding option to be publicly given to all banks. If they pay the market interest, what's the gain here? The natural thing to do would be to let every interested bank to participate," Radu Gratian Ghetea, chairman of the Romanian Banking Association (ARB) was quoted as saying by Mediafax.
BRD Groupe Societe Generale president and ARB vice president Bogdan Baltazar regards this step as a "glaring violation" of the banking law and feels the Cabinet's attitude can be described as "arbitrary and abusive."
"The banking law is not an organic law, but it is fundamental nonetheless and cannot be modified to suit one's will, by means of an emergency ordinance. It is an infringement upon the competitive climate that needs to be in place in a market economy," Baltazar said. In his opinion, the funding of such projects cannot be given to a credit institution, which has the State as guarantor of payment of deposits to the population. CEC is assimilated to a bank but operates under special regulations.
miruna.lebedencu@zf.ro
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