AFTER THE GOVERNOR'S CRITICISM Some banks have begun cutting their interest rates

Some of the commercial banks responded to the harsh message of the Governor of the Central bank Mugur Isărescu, concerning the high interest rates on deposits and acted accordingly, cutting their rates paid on deposits by as much as 0.50 percentage points.

The Romanian Commercial Bank, (BCR), the largest bank in terms of assets, cut the interest rates on deposits in lei, by as much as 0.50%. This means that for a deposit set up for one month, the interest rate went from 5.15% to 5%. For three-month deposits, the interest rates went from 5.5% to 5.25%. On six-month deposits, the interest rate went from 6% to 5.5%, and on 9-month deposits the interest rate was cut from 6.1% to 5.75%. The only deposit for which BCR still pays an interest rate of 6%, even after the cut was made, is the one set up for one year.

Raiffeisen Bank only cut interest rates for deposits in lei, intended for individuals. On one month deposits the interest rate fell 0.25%, to 4.25%, and on 3-month deposits the interest rate went from 4.7% to 4.4%. On the other-month deposits, the interest rate fell 0.40%, to 5%, and on deposits with 1-year maturity, the interest was only cut by 0.10%, to 5.5%.

MKB Nexte Bank cut the interest rates by 0.50% on all the deposits denominated in lei, for individuals as well as for companies. The highest interest rate paid by the bank is 6.25%, on 3-month deposits.

For companies that want to set up 1-month deposits the bank pays 4.5%. On the other hand, deposits with maturities longer than one month pay 5%.

Aside from MKB Nexte Bank, Intesa Sanpaolo Bank also cut the interest rates by 0.50% on deposits in lei paid to individuals and companies. For one month deposits the interest rate it is 5.5%, and for 3-month deposits the interest rate it is 5.75%. On the other hand, for deposits set up for a period ranging from six to twelve months, the interest rate is 6%.

Banca Comercială Carpatica (BCC) cut the interest rates by 0.25% on all the deposits denominated in lei, for individuals and companies.

On individual deposits with a maturity ranging from three to twelve months, the bank pays 6.25%, and on 1-month deposits the interest is lower (5.75%).

On the deposits of companies, set up for one month, the bank pays out 5.25%, and on deposits with a higher maturity the interest paid out amounts to 5.75%.

On deposits denominated in foreign currencies, BCC cut the interest rates by 0.15-0.25%.

Marfin Bank also shaved 0.25% off the interest rates paid on the deposits denominated in lei of the population and companies. Even under these circumstances, the interest rates paid by the bank are more than 1% higher than the policy rate. On deposits set up for one or three months, the interest rate paid is 6.75%, and for deposits of more than three months, the interest rate is 6.5%.

Marfin Bank raised the interest rate on deposits denominated in dollars and Euros, with values ranging between 0.05 and 0.75%.

Royal Bank of Scotland (RBS) also went against the grain and raised the interest rate on 1-month deposits in lei intended for the population, by 0.50%, to 6.5%.

On the other hand, RBS cut the interest rate on the deposits of companies. On 1-month deposits the interest rate was cut from 4.4% to 3.5%. On 3-month deposits, the interest rates fell from 4.75% to 4%, and on 6-month deposits the interest rate fell from 4.85% to 4.3%. The interest rate of 9-month deposits was cut by 0.45% and now stands at 4.5%, and the interest rate on 1-year deposits was cut 0.40%, from 4.6%.

In the beginning of the month, Mugur Isărescu warned commercial banks that raising the interest rates they pay on deposits was a "mistake". The lenders' race to attract depositors' money goes "against the grain" when it comes to the policy of the National Bank of Romania (BNR), which cut the policy rate twice since the beginning of the year.

The policy rate currently stands at 5.5%.