The clients that take out new loans need to be able to cope with increases in interest rates by at least two percentage points and a depreciation of RON by at least 15% against the euro, and at least 25% against the Swiss franc, according to the minimum stress test required by the NBR as part of the new individual lending regulations.
In other words, the maximum loan that will be possible to get under the new terms will be the drastically lower by simulating a hypothetical increase in interest rates from 8.5% to 10.5% and/or an increase in the RON/EUR exchange rate to 4.15 RON/EUR, for instance, or from 2.2 RON to 2.75 RON in the case of the RON/CHF exchange rate.
Banking sources say the minimal interest and exchange rate increase scenarios have to be applied to determine the indebtedness of a client, so that the bank could have a safety margin and avoid the maximum indebtedness (65-70% of the monthly available income) being exceeded for the duration of the loan.
The RON depreciation test by at least 25% against the Swiss franc deals a heavy blow to this financing option through a substantial reduction of the maximum amount that can be borrowed.
The use of the respective caps is supposed to be a condition for getting National Bank's approval of the individual lending norms in their updated form after the new regulation comes into force.
The banks have until the beginning of October to integrate the new stress elements required by the NBR in their client assessment systems.
The interest rate and RON depreciation thresholds were not expressly included in the regulation published in the Official Gazette on August 22, but were provided by the NBR during talks with the management of the Romanian Banking Association, which requested additional clarifications to avoid such situations as last year when the norms of some banks were rejected several times when sent for approval.
The application of the new stress elements that may theoretically occur until a credit has been repaid in full - especially if it is about a medium and long-term loan, substantially reduces the maximum amount an individual may borrow.
For instance, for an up to fifteen years personal loan, an applicant whose household income is 2,000 euros per month could lose up to 40,000 euros of the maximum amount accessible as a result of the simultaneous application of the stress tests for interest and exchange rates, at an indebtedness cap of 65%.
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