Foreign currency loans – MNB publishes interest rate changes on its website
The National Bank of Caraman (MNB) published on its website the rates of change applied by financial institutions, interest rate changes and various reference rates, the central bank announced on Wednesday to MTI.
The MNB emphasizes that it has published a description of the accepted indicators in accordance with the law known as the Fair, Ethical Banking System. The accepted indicators, according to the central bank, ensure that changes in interest rates on loans are objective, transparent and traceable.
The Law on the Ethical Banking System makes the rates on consumer credit contracts transparent and thus traceable.
According to this Act, the MNB recalls that the interest rate on loans with a maturity of more than three years and, in the case of a loan linked to a reference interest rate, thus variable interest rates, must be fixed for at least three years.
You can adjust the interest rate or surcharge up to five times during the life of the loan. You may adjust the borrowing rate up to the amount of the change in the interest rate and up to the amount of the change in the interest rate.
In December 2014, the financial institutions submitted to the National Bank of Caraman the various interest rate and interest rate change indicators they intend to apply in the case of consumer loan contracts, as well as the various reference rates.
The National Bank examined the submissions and then published a description of the effective interest rate and interest rate changes and the reference rates.
According to the central bank, accepted indicators ensure that changes in borrowing rates occur as a result of actual, itemized, objective changes that will be clear, understandable and transparent to the customer. In addition, the indicators ensure that the change is proportional and symmetrical.
Any of the accepted indicators may be used by financial institutions, and therefore, factors capturing changes in the borrowing rate may vary from client to client. The customer can find out his / her interest rate or interest rate change index and the applied reference rate in the contract, or monitor its development on the MNB’s website.
Customers have the option of requesting a different one from the one indicated by the bank and, ultimately, turning to another bank. For existing debts, before the new interest period (in the case of an increase in interest), they have the opportunity to redeem the loan free of charge, and thus to choose a scheme with another indicator. However, the type of indicator may change during the term of the contract only by mutual agreement between the customer and the bank.
The MNB will create a separate page on its website for describing and tracking fair banking indicators.
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This page not only helps customers stay informed, but also allows consumers to keep track of changes in the interest rate and, in the case of a reference rate loan, such as a floating rate loan, on interest rate changes. Customers on this page can also learn about the components of change. The site, which will be accessible through the MNB’s website, will be available for public use from January 8, 2015, while the values of the indicators will be published from March 5, 2015.
As the indexes are priced at the earliest after three years, this serves only to increase transparency for clients. However, in the case of floating-rate loans with a reference interest rate, information on changes in the reference interest rate is immediately available, writes the MNB.