Sharp price increases, the war at Romania’s borders, or increases in interest rates are concern for the Romanian consumers of financial services and products. Representatives of the banking system, through the Alternative Banking Dispute Resolution Centre (ABDRC), reassure consumers that attempts are being made to find solutions to the problems encountered in their relations with banks, and that the banking system is prepared for potentially unforeseen situations. People are advised to advise their bank as early as possible whenever they encounter such difficulties.

ABDRC financial education podcasts

Consumers, representatives of the Romanian Association of Banks, presidents or vice-presidents of commercial banks take part, together with ABDRC conciliators, in a series of meetings aimed at tackling financial education of consumers and making conciliation the alternative their alternative of choice when it comes to addressing their financial problems with the banks. A section of the ABDRC website addresses financial education specifically, and the messages of the awareness campaign that ABDRC initiates revolve basically around the key benefits of conciliation when addressing problems stemming from contracts, that is: the process is fast, free of charge and efficient.

What do banks have to say about the current uncertainty?

Bogdan Neacșu, President of the Romanian Association of Banks: I speak on behalf of all banks to reassure you that all services are available, and we haven’t changed our risk appetite so far. Indeed, we are cautious on the lending side, but we have taken all the necessary steps to overcome this period. It’s visible that we’ve managed to handle all cash withdrawals, although this panic was eventually proven unsubstantiated. Keeping money in current accounts with banks is the safest choice. The old story of keeping one’s cash “under the mattress” only caused more and more problems. Consumers should know that keeping large amounts of cash with them instead of depositing it with banks, in particular when there are special laws guaranteeing deposits, only brings about more uncertainty. Both during the pandemic and now, the Romanian banking system was and continues to be always “up and running”. It is always eager to adapt and deal with totally unpredictable situations that come our way without any “user manual”.

Omer Tetik, CEO Banca Transilvania: During the period to come, we expect to see more customers experiencing payment difficulties, at least temporarily. On the other hand, over the recent years we have also seen a fairly rapid increase in revenues in Romania. So, part of the impact is likely to be offset by this growth in revenues. We have also seen saving increasing in Romania, too. And I am glad they have. Our retail and corporate customers have created a buffer, a backup for themselves for this period. Should interest rates remain high and we see a significant change in the monetary policy, with further increases in interest rates, we will come up with proactive proposals to overcome these difficult times together with our customers.

Flavia Popa – Secretary General BRD: People got scared and started withdrawing money from the bank. But they saw that there was enough money and there was no risk. And then they stopped. It is only our panic that can sometimes lead to the disaster we fear. The Romanian banking system is very solid. It enjoys excellent liquidity. It does have all necessary resources to deal with unthinkable scenarios. Our role in the bank is to make sure that we “pay back” the same trust the others place in us. If you only knew how many stress tests we do, what type of crisis scenarios… We take things to the extreme, and there we still have a buffer so we can move freely. After all, what do bankers do? They review the risks and find solutions, to the best of their abilities.

Irina Rîmaru, ABDRC consumer: There are many bona fide consumers, like us, and this should make banks more flexible and willing to lend a helping hand.  We want to have a good relation with the bank also in the future, but when family members or friends see banks making things difficult for us, then they would have become themselves customers of that bank. Which is why I recommend people to pay increased attention when choosing the bank they would work with. To look into their track record of assistance provided to consumers faced with difficulties. 

Alexandru Păunescu, representative of the National Bank of Romania in the ABDRC’s Steering Board: The messages conveyed by the representatives of commercial banks stand for the strongest argument for the trust the financial and banking system needs during such difficult times. And when these messages are voiced in debates organized by ABDRC, it means that the banks of the Romanian banking systems have fully grasped the usefulness of conciliation, but also the need to come up with solutions to the problems reported by their own customers without undue delay.

Recommendations made by conciliators for how consumers and banks should relate during this time

Mihai Tănăsescu, ABDRC conciliator: We need to deal with the idea of having a bank in our life. You might have been reckless, experience difficulties at work at one point in time, there are many instances. Or a spouse dies, and the survivor remains to raise the child alone… such things can happen to anyone. Once we understand that having problems is a part of life, and we need to survive after all, and there’s nothing to be ashamed about, I believe that ABDRC would be considered and used even more. By both consumer and banks. 

Nela Petrișor, ABDRC conciliator: When they bought a house or other goods, consumers definitely wanted it. But such a joy can easily turn into a burden. And that’s precisely why consumers come to ABDRC, because they cannot carry that burden any more. To restore some balance, because if the bank wants to keep its customers happy, we need to help them understand and overcome such deadlocks by mutual concessions.

Camelia Popa, ABDRC conciliator: I advise consumers to pursue their own interest, not to get inspired by other cases, or make comparisons between conciliation and court proceedings. To think only if the solution they receive it’s good for them. And not only at this time, but also in 6 months or 1 year’s time. We have noticed developments in these solutions banks proposed part of negotiations. These are diverse and tailored to the particular case of the customer. The status of the contract, how long past due payments are, what’s been paid or what hasn’t been by consumer, all of these matter in any negotiation. And all of these need to be considered and used to build the end-of-conciliation solution.

Developments in the first 3 months of 2022

During the first three months of 2022, as many as 133 consumers went through the entire conciliation process (application filing, negotiation, final resolution accepted by both parties), and 112 of them reached an amicable settlement directly with banks/NBFIs, having first approached ABDRC.

Compared to the same period of last year, we have noticed an increase in the number of cases concluded by resolution (successful negotiations assisted by the Centre’s conciliators): in fact, from 82 resolutions observed in the end of Q1 2021, we have reached 133 resolutions in the first three months of 2022 (an increased by 62%). Q1 2022 is also the quarter with the second largest number of cases formed (i.e. applications received by banks for negotiation) since the very establishment of the Centre.

Furthermore, in the first three months of the year, 112 applications were settled amicably by traders after the respective cases were referred to ABDRC (traders negotiated directly with consumers): 24 applications were settled amicably with banks, and 88 applications were settled amicably with NBFIs. The number of amicable settlements increased as compared to the same period last year by more than 200%.

About ABDRC: ABDRC is an entity set up under a European Directive, and intermediates, free of charge and in not more than three months, negotiations between consumers and banks or NBFIs, for contracts/agreements in progress. Consumers from any county of the country may file applications with the Alternative Banking Dispute Resolution Centre (ABDRC) filling-in an online form directly on the website www.csalb.ro. Once the bank accepts to enter the conciliation/negotiation procedure, a conciliator is appointed. ABDRC works with 19 conciliators, of the best specialists in law and with relevant experience also in the financial and banking field. Everything is settled amicably, and the understanding between the parties has the power of court judgment. More information about the work of the Centre is available by phone at 021 9414 (charged a normal rate).