Honest word of a creditor
Belarusian banks are advised to refrain from inventing new loan products with «cunning» rates
In the National Bank repeatedly noted that banking system of country began to turn in the direction of clients – individuals, and that retail services in the coming years can be a major competitive field of credit institutions. In fact, that is already happening – all 32 Belarusian banks to some extent are involved in retail services. At the same time, after bringing order in the credit policy, the regulator continues to insist that the banks play fair game on this field.
The banking sector in 2013 will continue to grow thanks to the in popularity of retail lending among Belarusians. « In recent years, banks has to pay serious attention to working with the population. And it is natural. Foreign experience shows that if a bank wants to develop, it must actively work in the retail sector», – Julia Sakovich, head of the department of the financial literacy of the National Bank, says. According to the expert, development of the retail sector in Belarus can be called a priority. Currently in the country 32 banks operate and 25 of them provide services for fundraising population. All without exception banks provide services to citizens by lending, by settlement and cash services. Seven banks are working with precious stones, 10 banks – on operation with precious metals. Suffice to say that retail deposits in banks in the December 31, 2012 amounted to 79 trillion Br., an increase for all of last year by 1,6 times. But the growth of loans granted decreased – in 2011 there was an increase in the loan portfolio of 31%, and in 2012 – only of 25%».
Julia Sakovich reminded that in January amendments to the Banking Code entered into force. These changes canceled, in particular, the collection of monthly fees and other payments for the loan. Corresponding amounts must now include in full interest rate on the loan. However, it should be noted that not all financial institutions absolute accepted the new rules of the game and, understand the situation, gradually started to cheat.
One of the most common tricks of banks is the establishment of rates is not in the annual percentage, but in the month and even in week. Of course, when in the advertisement brochure says that the rate is of 6 % per month, even pupil of third grade will be able to multiply the numbers and understand that for the services of the bank will have to pay for the year 72 % of the amount borrowed. But in any case, the attempt of manipulation of consciousness is obvious.
Another trick that does not contradict the new legislation is a commission for early repayment of credit. Here, at first glance, everything is clean – the bank can’t warn the client of such overpayment, such circumstances are found out later.
It is clear that such «tricks» do not go unnoticed by the regulator. «National Bank has advised banks to eliminate the practice of establishing hour, daily, monthly interest rate for the loan. Department also has proposed to update the information on retail loans on the websites of banks, making it transparent, accessible, complete and reliable», – Julia Sakovich explained. In this case, the requirements of department are simple: it demands to refrain from imposing new complex credit products containing attendant paid services of bank that only further confuse the customer.
However, in the banks noted that the policy of openness – this is the very thing that attracts customers. «We should strive to ensure that the products have been easy and understandable for the client, – Tatiana Medvedev, chairman of IdeaBank, said. – After all, than the more complex the product, the more difficult it is to sell. The client immediately asks a lot of questions: why, what and how? We removed the additional bank fees at the end of last year, not waiting for January, and saw that the citizens more willing to take such loans.
Experts note, that after the amendments to the Banking Code, bank rates began to decline gradually. Banks look at each other and trying to be a little more favorable against competitors, reduce the percentage. On average, cash loan interest rates on bail are set from 39 % to 75 % per annum. Banks have reduced slightly and the size of car loans, although their size in different banks is very different. Buy a used car loan can be at rates ranging from 36 % to 65 % to borrow for new cars can be a little more expensive – from 38 % to 65 %. The loan terms, however, very small, is only 4–5 years.
By the way
Experts note that by the size of loan repayments that Belarusians monthly release of their salaries, the country is close to Brazil and Romania, the people of which 20 % of the salary give away to the bank. This is significantly higher than in the U.S. and Europe. In Italy, the figure is 10,8 % in the U.S. – 10,9 %, in the France – 13,10 %, and the Spaniards give away to banks 14.9 % of their salaries.