The amendments and supplements to the Decision on the Registration of Mandatory Cash Records of the Croatian National Bank expand the basis for calculating such obligations in the event of exceeding the permitted growth rates of loans granted to users in the country (excluding the Republic of Croatia and republic funds), it was announced today by the CNB.
The previous application of the mentioned Decision over the past months has yielded the expected results in slowing down the growth of bank loans. However, the CNB warns that to circumvent this restrictive measure, some banks have begun to use their existing or newly established companies to increase lending in the form of consumer and other loans, through credit cards, transfer of receivables, or based on some other legal transaction under which legal entities owned by the bank become creditors. For these purposes, foreign sources of funds are also used, most often obtained from foreign (co)owners of these banks and companies. Therefore, with these amendments and supplements to the existing Decision from October 1, such forms of lending by legal entities based in Croatia, in which control is held by the bank or the owner of a qualified share in the bank that is a financial institution, are included in the calculation of the permitted growth of 0.5 percent per month, with the starting calculation basis for these categories of lending being the state as of September 30, 2007. The measure on the growth of lending of just half a percent per month, which also includes off-balance sheet positions, was adopted by the CNB at the end of June with application from the beginning of July, likely so that banks would not have more time to prepare for the tightened measures. Thus, this decision was also made one working day before the start of the next month. (H/ L. K.)
