Romania’s National Bank (BNR) has asked President Klaus Iohannis to send back to the Parliament the recently approved law that defines giving in payment, allowing the mortgage debtors to get rid of their debts to banks by giving the mortgaged assets to the banks.

The Parliament needs to amend the bill based on a financial, legal, and ethical perspective, said BNR vice-governor Bogdan Olteanu in an open letter to Iohannis, reports local Mediafax.

The bill can generate a systemic risk in its current form and will affect the local banks’ financial stability. Local bankers say that the law violates the Constitution and that it will bring them big losses and limit the access to financing.

President Klaus Iohannis may send the law back to the Parliament for review and suggest, unofficially, that the law should apply only to loans under EUR 250,000, according to political sources.

editor@romania-insider.com