The first reaction of the National Bank after the record fine given to the banks by the Competition Council
The Competition Council announced that it has fined ten banks over 700 million euros, stating that the banks manipulated the ROBOR rate, which decides the value of the monthly installments for people who have loans with variable interest in lei contracted before May 2019. The spokesperson of the National Bank, Dan Suciu, says that the Council's decision will not affect the way this index is established, informs Profit.ro.
“The Competition Council's decision does not cover the trading regulation approved by the NBR. Regarding the practices invoked by the Council, we understand that the decision will be challenged in court and will be clarified on this occasion,” Dan Suciu, the spokesperson of the National Bank of Romania, said for Profit.ro.
In a statement issued on Sunday, the institution announces the fine of 10 banks with a total amount of 3.73 billion lei (710 million euros) for coordinating their behavior in the ROBOR setting procedure, thus violating the Competition Law and the Treaty on the Functioning of the European Union.
The Competition Council's investigation targeted 11 banks, but fines were applied to 10 because, in the meantime, OTP Bank was taken over by Banca Transilvania, so the latter pays two fines.
Their amount is as follows:
● Banca Comercială Română SA: 577.36 million lei;
● BRD-Groupe Société Générale SA: 412.47 million lei;
● Banca Transilvania SA: 875.74 million lei;
● Banca Transilvania SA (for the deed carried out by OTP Bank România SA): 85.03 million lei;
● ING Bank NV Amsterdam Bucharest Branch: 405.91 million lei;
● Raiffeisen Bank Romania SA: 442.49 million lei;
● Exim Banca Românească SA: 96.49 million lei;
● CEC Bank SA: 332.98 million lei;
● UniCredit Bank SA: 431.03 million lei;
● Banca Comercială Intesa Sanpaolo Romania SA: 28.1 million lei;
● Libra Internet Bank SA: 45.86 million lei.
The Competition Council's allegations
The investigation established that the sanctioned banks exchanged confidential and strategic information regarding the level of ROBOR during the fixing procedure, although the confidentiality of firm quotations during the fixing period is stipulated both by competition rules and by national and European regulations.
“Specifically, during the fixing procedure, when the firm quotations should be independent, the banks coordinated their behavior according to the competitors' quotations. The independence of the quotations during the fixing period is important, even more so in the case of maturities for which the volume of actual transactions is reduced (3, 6, 12 months), the average of these transactions cannot be used as a relevant indicator”, says a press release from the Competition Council.
Thus, a higher level of the ROBOR index was established, which benefited creditors but directly affected consumers and other debtors whose contracts are related to ROBOR.
“We have a set of evidence that must be analyzed in conjunction. The transparency of transactions is beneficial in some situations. The problem arises, however, in the case of firm quotations sent during the fixing period, which must remain confidential, an essential aspect in the case of maturities where the volume of actual transactions is reduced. Considering the large volume of loans, variations in the size of a fraction of a percentage can generate substantial amounts,” said the president of the Competition Council, Bogdan Chirițoiu.
