ARB: Lowering commissions affects banks

Florin Danescu, executive president of the Romanian Banks Association (ARB), has harshly criticized the lowering of inter-banking commissions to 0.2 percent for debit cards and 0.3 percent for credit cards, arguing it has a negative impact on the economy and slows down the process of narrowing the gaps.
“If all current initiatives are aimed, in some way or another, to the electorate, I believe we must find positive solutions to support the players of the economy. This does not mean we should put it into practice at a time when Romania is growing, when we must catch up with all sorts of indicators that are advanced compared to Romania’s; solutions like telling free market players how to set their costs and structure their processes and business models are not the kind of support economy players are looking for in order to catch up with better-developed economies,” Danescu stated at a press conference on bank cards.
He commented on an item of news according to which lowering inter-change commissions was beneficial to bank customers by saying that since economic flow consists of all the players, it cannot be beneficial to part of the flow and detrimental to the rest; ultimately, he continued, the reduction is beneficial to retailers. Danescu also expressed ARB’s position that credit institutions must preserve their capacity to continue infrastructure investments and increase the electronic payment penetration rate, which is currently at 6 percent in Romania, compared to a European average of 30 percent. The bank representative also noted that the statement that banks have enough resources and can support this legislative amendment is no longer valid.
According to the members of ARB, the measures pursuant to the European directive on lowering inter-banking commissions should be implemented either simultaneously in Romania and other European States, or later. So far, only two countries have implemented the regulations – Hungary and Poland. The reduction should be applied gradually, and not “abruptly,” they went on.
The central bank is not sure whether lowering inter-banking commissions can have positive effects on consumers unless three specific market requirements are met, namely low intermediation levels, increased appetite for cash, and low incomes, said Ruxandra Avram, service chief of the Financial Stability Division, National Bank of Romania.

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