The restructuring of non-performing loans has been slower in Romania than in other EU member states. However, further to the implementation of new regulations, the National Bank of Romania has now begun to apply pressure on local banks to dispose of their problematic assets and clean up their balance sheets. Consequently, domestic and international non-performing loan deals are becoming more common on the Romanian market.
The novelties brought by the new Civil Code include the fiducia, a concept similar to the common law trust. Although the fiducia is purported to facilitate implementation of trust-based legal structures, its use in practice remains limited due to, among other things, a lack of flexibility in its establishment and operation.
A new law which implements the EU Consumer Credit Directive sets out the conditions for the conclusion of consumer credit agreements. Credit institutions are now obliged to offer the consumer the credit contract which is best suited to his requirements, given his financial situation, the advantages and disadvantages of the proposed product, and the purpose of the credit.
The Romanian currency market has been made more accessible and conducive to foreign investment, as National Bank of Romania authorization is now required for just a few capital currency operations, and all current currency operations are free of such formalities. Currency operations are now governed by the principle of good faith.
Including: National Bank of Romania; The Banking Law; Prohibitions; Permissible Activities; Authorization; Managers and Directors; Prudential Requirements; EU Credit Institutions; Bankruptcy.
This update acts as a road-map through the legal issues which arise where a foreign credit provider not acting through a branch in Romania embarks upon documenting and securing a credit made available to a Romanian resident. It shows how finance structures aimed at creating sound security can be achievable to the satisfaction of banks.
A new law concerning the acceleration of economic reform came into force in August last year and promised a revolution in taking and enforcing security over assets in Romania. It is now possible for foreign banks to take security from a Romanian company on a project finance basis and obtain comfort in areas not available even under some Western European jurisdictions.