Local subsidiaries of foreign groups are paying excessive interest rates on loans of around EUR 10 mln contracted with their financial groups, claims Florian Neagu, deputy director at the Directorate of financial stability from the National Bank of Romania (BNR).

The interest rates paid to parent groups are higher compared to those they would pay to local banks. It's either transfer pricing or bad management at the local banks that fail to attract the FDI companies as customers, the BNR official concluded.

"That raises some questions. Maybe it's a problem of transfer prices, or the quality of services of the Romanian banking system needs to be improved", he said, according to Hotnews.ro.

The total volume of loans, around EUR 10 bln, represents some significant figures compared to the local financial intermediation (some EUR 40 bln worth of non-government loans extend to companies and non-bank financial institutions).

"This value is worth investigating because there is a lot at stake," Neagu said.

andrei@romania-insider.com

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