The sale of non-performing loans by banks to an agency that pursues payments on debts which is a subsidiary of the bank is a violation of the statutes of the banking and civil law and builds an illicit solvency status, according to Gheorghe Piperea, founder of law firm Piperea si Asociatii.
Why are banks against a personal bankruptcy law?
The lack of a bankruptcy code that would allow individuals in financial distress relief from some or all of his debt is a major problem. Even though the Council Regulation (EC) No. 1346/2000 on insolvency proceedings applies to all Member States, Romania has not yet introduced a similar legislation not even after three years since the accession of the country to European Union. But passing the law would face a bitter opposition from the bankers, Gheorghe Piperea told Wall-Street.
“The political class has constantly ignored the need of such a regulation and the only issue that could plague this project from day one would be the opposition from the bankers who cite unfavorable economic conditions to overhaul the bankruptcy code, amid rising delinquency rate and increase of NPL ratio in bank’s total lending. Bankers say the regulation that would “rescue” debtors would lead to an increase in non-performing loan ratio, as many bad debtors would stop repaying the loan and trying the rescue themselves by filing for bankruptcy proceedings”, said Piperea.
But this approach is wrong, Gheorghe Piperea saying it is “irritating” from the perspective of a EU citizen: if a bankruptcy regulation for individuals is in force in all EU Member States, then Romania should adopt it accordingly.
“Second of all, there is banks’ arrogance towards us, Romanians, who are perceived as scammers, considering that the country’s five largest banks gained nearly €8bln from retail loans since 2003”.
The sale of non-performing loa
