Foreign currency loans harder to obtain

2010-08-31

On 23 August 2010, part of regulations comprising Recommendation T prepared by the Polish Financial Supervision Authority came into force. Some of the provisions can lead to stricter restrictions concerning the availability of foreign-exchange-denominated mortgage loans, as reported by PAP.
Recommendation T comprises the rules applicable to, inter alia, the management and evaluation of risks related to retail loans. According to the document, banks are expected to impose stricter requirements for obtaining foreign currency loans, which can significantly reduce the availability of these loans. Under the recommendation, if a loan is to be repaid over a period exceeding five years, a downpayment of at least 20% is required. If a customer does not have sufficient funds, a loan insurance policy will be necessary to ensure loan repayment or the customer will have to offer additional security for the loan (e.g. another real property). Recommendation T also advises banks to separate procedures concerning loan sale procedure from those related to loan application processing and risk evaluations activities. While assessing credit rating rating, banks are advised to use both their own and external databases. On the other hand, Recommendation T puts emphasis on clearer and more straightforward delivery of loan-related information to customers. Banks are also expected to facilitate disbursement and repayment of loans in a given currency.

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