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August 2, 2021

BNR governor: 3,907 debt discharge notifications as of July 20

As of July 20, debtors had filed with banks 3,907 debt discharge notifications for nearly 1.13 billion lei; of these, 2,634 notifications (67.4 percent) were challenged by the banks, Governor of the National Bank of Romania (BNR) Mugur Isarescu announced Monday.

“We hereby present you some statistical data on the notification process under the debt discharge law. Right from the start we specify that the law does not provide us with the possibility, nor does it require us to collect statistical data. The information is based solely on bank reports sent at the request of the National Bank of Romania for monitoring the prudential position of credit institutions and the assessment of the banking system’s stability. (…) As far as debt discharge notifications are concerned, we had 3,907 as of July 20, of which 2,634 or 67.4 percent challenged by the banks,” Isarescu explained.

According to the BNR governor, 404 borrowers notified more than two loans, therefore the total number of borrowers, specifically 3,398, is lower than the total number of notifications, yet most filed a notice for just one loan.

Isarescu also said that the total amount of notified loans, namely 1.13 billion lei, represents 1 percent of the total retail loans and 2 percent of mortgage loans.

He also mentioned that 56 percent of the notifications refer to loans more than 90 days past due, and 44 percent are not bad loans. In most cases, the loan amount to be repaid is higher than the value of the real estate collateral, meaning that there is an obvious reason for giving in payment, because the value of the house was less than the loan and the debtor was encouraged to resort to this operation. This is the case for 64 percent of the notifications and 75 percent of the amount of notified exposures. For 504 notifications, the value of the collateral is higher than the remaining loan payment,” said the BNR governor.

Regarding the indebtedness of the borrowers who submitted debt discharge notifications, in most cases it exceeds 65 percent. In addition, most loans for which notifications have been made are in excess of 300,000 lei, according to data presented by the BNR governor.

The debt discharge law allowing the sale of property for sinking obligations assumed under a loan was published in the Official Journal on April 28 and came in force on May 13, 2016.

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