Banks Suspected by the Competition Council of Blocking Access to Loans for Some Customers

The Competition Council suspects that banks, through the way they calculate the credit score, are blocking access to loans for some customers and making refinancing more difficult. In this context, the Competition Authority conducted inspections at ten banks last week, as well as at the Credit Bureau and the Romanian Banking Association (ARB), according to a press release from the institution. The inspected banks include Alpha Bank Romania S.A., CEC Bank S.A., Garanti Bank S.A., Raiffeisen Bank Romania S.A., ING Bank N.V. Amsterdam Bucharest branch, Banca Transilvania S.A., Banca Comerciala Romana S.A., BRD - Groupe Societe Generale S.A., Credit Europe Bank (Romania) S.A., First Bank S.A.

Bogdan Chiritoiu, the President of the Competition Council, stated yesterday: "The inspections have concluded. They lasted three days last week and targeted the Credit Bureau and its shareholders. We already have an ongoing investigation where we are looking at how banks determine interest rates, how they establish the index that underlies interest rate setting - ROBOR. This time it's a related subject. We're not looking at the interest rate, but rather at access to loans and lending conditions. The suspicion is that through the way the credit score is calculated, access to loans for some customers is blocked, and refinancing is made more difficult."

He mentioned that the suspicions arose from the analysis that the Competition Council is conducting in the banking sector, based on electronic documents from computers and phones: "It's important to note that we're not randomly selecting documents; we're relying on a court order. The judge approved the collection of these documents from the banks."

The documents collected during the surprise inspections are currently under review by the Romanian competition authority as part of specific procedures.

"Surprise inspections are authorized by the Bucharest Court of Appeals and are justified by the need to obtain all the information and documents necessary to clarify possible anticompetitive practices under investigation. Conducting them does not represent a presumption of guilt for the companies," the source concluded.

Regarding the interest rate investigation, the President of the competition authority expects results next year.

Competition law prohibits any agreements between companies and concerted practices that prevent, restrict, or distort competition in the Romanian market.

According to representatives of the Romanian Banking Association, the Competition Council's action is a normal and routine practice in a functioning economy.

The ARB press release emphasizes: "The Romanian Banking Association and its member banks conduct themselves in accordance with competition rules, which represents a constant and top priority in the banking community. In this regard, the banking community has adopted the Guide on Compliance with Competition Rules, through which participants have committed to exhibit honest behavior and compliance with legal provisions applicable in the competition field during their activities. This guide covers activities conducted within the Association and its adoption encourages effective competition in the financial-banking sector.

Credit institutions must take all measures to reduce credit risk, in order to maintain a low level of non-performing loans. Banks have an obligation to verify the creditworthiness and repayment capacity of each debtor, and among the tools available are checks with the Credit Bureau. This is a regulated, mandatory aspect that operates according to European norms established in this area, to which Romania is also a party. Thus, credit institutions have a duty to prudently use the national-level databases to determine payment behavior. The method of using this information varies among banks, depending on each one's risk appetite. To ensure responsible lending, bank financing must be directed with predictability and safety, with the certainty of future repayment."