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Bulgarian Banks Required to Notify for Increased Interest Rates

Wednesday, Nov 17, 2010

Adopted changes in the Bulgarian Credit Institutions Act envision that by December 31 banks have to inform their clients for increasing interest rates or the total costs of the credit, by specifying the amount of the changed installments.

The Bulgarian National Radio has reported that on Wednesday the Bulgarian Parliament adopted amendments, which oblige banks to notify their clients for changes in the interest rate on deposit as well. In case of temporary cash deposit with fixed interest rate, banks cannot reduce the interest until the contract expires.

Banks will also have to inform about changes in the interest rate or the fee, which leads to increasing of the repayment of the credit that is not customer credit.

They are also obliged to notify the client in a manner agreed between the parties, before the changes enter into force. The law envisions the creation of supervisory committees, which would coordinate the activities of the various authorities during the ongoing supervision.

The Bulgarian National Bank has been given a legal basis for participation in the Committee of European Banking Supervisors (CEBS) and compliance of its guidelines in the local banking system.

Source: novinite.com