Bulgarian President Reserved about Fixing Bank Rates

Bulgaria's President Rosen Plevneliev (l) with Ivan Iskrov, Governor of the Central Bank, BNB. Photo by BGNES

Bulgaria's President Rosen Plevneliev supports regulation of small credit lines, but has reservations about administrative regulation of bank interest rates.

Plevneliev made the comment during a meeting with the Governing Board of the Central Bank, BNB, which was part of his agenda to get acquainted with different institutions at the start of the new term.

Bulgaria's Deputy Prime Minister, and Finance Minister, Simeon Djankov, just announced that the cabinet is planning amendments to the law with the aim of introducing more clear rules in loan granting – to make the interest rate the same for all banks as it is in most European countries, instead of each bank determining their own, and to either declare bank fees illegal or make banks share them with the credit holders.

"The idea to better regulate small credits – up to BGN 400 – with more rules is a good one because more transparency means more rights and better protection of consumers. On all other ideas of the Finance Minister – the presidential office will issue a statement after a larger debate," said Plevneliev, quoted by the Bulgarian "Dnevnik" daily.

He further pointed at a possible debate on the issue to be organized precisely by his institution to elaborate on all details and motives for Djankov's ideas, but stressed that it would be difficult to lower bank interest rates through administrative levies.

According to the President, despite the crisis, banks in the country are stable and continue to make profits.

The BNB Governor, Ivan Iskrov, declined comments on the idea to bind the credit interest rate with some of the inter-bank indexes and to eliminate or lower bank fees.

"The Central Bank has always been a good partner of the government – when we see something concrete on the table and get invited to voice an opinion, we will do so," Iskrov stated.

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