NBRB prepares policy document on lending practices

MINSK, 14 March (BelTA) – The National Bank of the Republic of Belarus has prepared a draft regulation to amend lending rules, Sergei Dubkov, Deputy Chairman of the Board of the National Bank of the Republic of Belarus, told media on 14 March.

At present the National Bank cannot interfere with pricing policies of individual banks, however, it can make decisions indirectly affecting tariff policies.

Complaints indicate commercial banks can increase the real cost of loans by considerably raising prices for operations that accompany lending. The National Bank of the Republic of Belarus has prepared a draft legal document that addresses the problem. Borrowers will get the same rights they get now if substantial terms of the lending contract like interest rates, deadlines, and currency are changed.

The official also touched upon changes of interest rates for loans. “Last year and the beginning of this year made considerable changes to the interest rate policy of the National Bank and the entire banking industry,” he said. The interest rates were used to handle the crisis. “Whether interest rates are reduced or raised, sharp changes of interest rates are unacceptable because they may result in losses or short-term profits but rule out stability in any way,” he said.

The NBRB believes raising the financial awareness of citizens is the answer. However, despite the high educational level of the population the Belarusians lack legal and financial knowledge. It is quite difficult to read through a lending contract. In the international practice banks of several countries have agreed to formalize the contracts without hindering rights of borrowers and lenders. The NBRB is keeping an eye on the trend.