The Romanian Association of Banks (ARB) claims that the investigation and decision of the Competition Council regarding the activity of some banks on the ROBOR market generates public confusion and unrealistic expectations among customers with loans whose interest rates are indexed to this indicator.
ARB: ROBOR loan customers are being ‘incited by false hope’. Archive photo
In a public release, the organization states that the affected banks will use all legal remedies and ask the competition authority for clarifications additional information on the allegations made.
The Romanian Association of Banks (ARB) claims that the investigation and decision of the Competition Council regarding the ROBOR market generates “confusion and unrealistic expectations“, and “clients of banks with loans anchored in ROBOR are instigated by inducing false hopes”. In a public statement, the ARB states that the credit institutions will use “all legal remedies” and asks the competition authority for clarification on the allegations made.
ARB asks for clarification on the legal basis of the decision and the role of market institutions
The ARB requests “the presentation of the elements of regulation and competitive conduct that were violated”, as well as the mechanisms by which a possible “distortion of the market” would have occurred. At the same time, the organization invokes the role of the National Bank of Romania as “organizer, regulator and supervisor regarding the functioning of the money market”, emphasizing that a clarification of the framework in which the ROBOR mechanism operates and the limits of competence of the institutions involved is necessary.
ARB also refers to the European framework regarding the prevention of market abuse and the manipulation of benchmarks, arguing that the interpretation of the situation must be made in relation to the existing regulations and the powers of each individual institution.
“Confusion and unrealistic expectations”
The association says the way the investigation is communicated can create “confusion and unrealistic expectations” among customers with ROBOR-related loans. At the same time, the organization claims that certain messages in the public space can induce the idea of collective efforts to recover some sums, “before the courts give a definitive ruling on the case”.
According to the quoted source, the banks benefit from the presumption of innocence and that any disputes will be resolved exclusively through legal and judicial mechanisms, in a process that can last a long time.
The bankers say that the affected credit institutions will use all legal means of appeal against the Competition Council’s decision, which they consider “unfounded and unfair” and which would “unfairly damage the reputation of the banking industry”.
In the organization’s view, such decisions do not exclusively concern banking institutions, but can have wider implications on financial stability and the financing capacity of the economy. The ARB maintains that the banking sector operates in a “strictly regulated and supervised” framework, with clear transparency and compliance obligations.
Effects on financial market perception
According to the ARB, some previous decisions on the banking sector have been challenged and later changed in court, which, according to the ARB, has influenced public perception of the industry.
The organization warns that “oversimplifications, forced conclusions and populist communication” can distort the perception of the financial market and affect confidence in the banking system and the financing mechanisms of the economy.
ARB claims that the banking system in Romania remains “one of the pillars of society’s development”, with an essential role in financing the economy, the population and the state, and reaffirms its commitment to the principles of fair competition, transparency and compliance with the regulations in force.
The ARB information supersedes that of the BNR issued on Thursday, June 11, by which the central bank claimed that clarifications were needed regarding the Competition Council’s decision in the case of ROBOR.
The Competition Council’s investigation into the ROBOR case
The Competition Council announced the sanctioning of ten banks participating in the mechanism for establishing the ROBOR index, following an investigation that covered the period 2019-2022.
The competition authority reported that it found the existence of exchanges of sensitive information between the credit institutions participating in the ROBOR fixing process, assessing that these practices affected the competitive environment on the money market. In total, the fines applied exceed 80 million lei.
Banks fined in the ROBOR case go to court. Appeal the sanctions of the Competition Council
The Competition Council specified, however, that the investigation did not concern the regulations or policies in the banking sector, nor the operation of the ROBOR mechanism established by the National Bank of Romania.
After the sanctions were announced, several banks said they would challenge the competition authority’s decision in court. At the same time, the case generated public debates regarding the impact of ROBOR on loan rates and the possibility that people who had loans linked to this index could claim compensation.
In this context, both representatives of the banking system and the Center for Alternative Dispute Resolution in the Banking Domain (CSALB) recommended caution, stressing that the decision of the Competition Council is not final and can be analyzed by the courts in the coming years.
ROBOR (Romanian Interbank Offer Rate) represents the average interest rate at which banks are willing to lend to each other on the money market. For many years, the index was used to calculate variable interest rates for many loans to households and businesses, before new personal loans were linked to the IRCC index. Thus, even today there are hundreds of thousands of credit contracts in progress that have interest calculated according to ROBOR.
Total penalties of 710 million euros
The competition authority announced that it fined ten banks with a total amount of 3.73 billion lei, equivalent to approximately 710 million euros.
According to the Competition Council, the sanctions were applied for the violation of national and European competition legislation, namely the Competition Law and the Treaty on the Functioning of the European Union, by coordinating behavior in the procedure for establishing the ROBOR index.
The decision represents one of the most important sanctions ever applied by the competition authority on the financial-banking market in Romania and opens the prospect of new confrontations in court between banks and the authorities in the coming period.
The ROBOR scandal. Can Romanians recover their money from installments? What the experts say
The fines applied to the 10 banks
The Competition Council imposed significant fines, the largest going to Banca Transilvania, followed by Banca Comercială Română, Raiffeisen Bank, UniCredit Bank and other credit institutions, the total amounts amounting to several billion lei cumulatively at the level of the entire sanctioned sector.
The fines applied are as follows:
- Romanian Commercial Bank: 577.36 million lei
- BRD – Groupe Société Générale: 412.47 million lei
- Banca Transilvania: 875.74 million lei
- OTP Bank Romania: 85.03 million lei
- ING Bank: 405.91 million lei
- Raiffeisen Bank: 442.49 million lei
- Exim Banca Românească: 96.49 million lei
- CEC Bank: 332.98 million lei
- UniCredit Bank: 431.03 million lei
- Intesa Sanpaolo Bank Romania: 28.1 million lei
- Libra Internet Bank: 45.86 millions of lei
