Over 6,000 debt discharge notifications recorded by BNR at end-2016

The submission of debt discharge notifications continued, reaching 6,400 at the end of 2016 and the volume of notified loans standing at RON 1.8 – 1.9 billion, Deputy Director of the Financial Stability Directorate within the National Bank of Romania (BNR) Florian Neagu stated on Tuesday

This taking into account that the pace has dropped from over 1,000 files per month, in the first month since the Law was enforced, to 100 – 150 files per month, over the last months of 2016,.

“It isn’t high, but it isn’t low either. (…) If in the first months since the Law was adopted we had over 1,000 notifications per month, over the last months of last year, the average reached 100 – 150 notifications per month, but remains to be seen what will happen, because it just might be a waiting period, and it could start again,” Neagu explained.

According to the central bank official, the data confirms the initial estimations, according to which hundreds of thousands of cases were to use this procedure. Neagu also explained that, according to the BNR analysis, almost 300,000 debtors would be eligible for debt discharge and the loans volume would be RON 42 – 43 billion.

“This is the extreme case scenario. Making a comparison to what is happening on the market, we established that we have almost 2 percent notifications of the maximum admissible level and the trend shows a significant flattening,” Neagu added. He pointed out that BNR found that the risk of an uncertain legal framework is significant, following the first assessment of the impact of debt discharge law on the banking system.

Currently, there are over 500 of debt discharge notifications for 2, 3 or more properties which, according to Constitutional Court (CCR) decision, can not be admitted.