Public debate on the changes in force since 2011, T recommendation actually began even before its introduction. Her strict guidelines caused many negative consequences, which in a way extremely painful, felt a large group of potential borrowers. Do the changes affect recommendation on the availability and cost of credit?
The need for change
Recommendation T is a set of guidelines of the Financial Supervision Authority (KNF), concerning the management of risks associated with lending to retail customers. It it good practice, a kind of instructions for banks. Their implementation is not mandatory, but its absence can lead to negative consequences, which banks avoid adhering to the principles outlined in the recommendation.
The current recommendation T was developed in 2010, but its introduction took place at the beginning of 2011. Should be noted that its provisions are generally considered too stringent. This applies especially elevated rates creditworthiness assessment. This recommendation focused particularly on the fact the debt ratio to income, actually, completely eliminating the possibility of applying simplified assessment of creditworthiness. These records were detrimental to both the banks and their customers. Banks have to put up with the outflow of a significant portion of customers who meets stringent requirements, they were forced to use the services of various companies of para-banking.
The new draft Recommendation T, which is currently in the consultation phase, expected changes that have influence on increasing the availability of credit, as well as their price. The major changes include:
- Self-determination of the risk ratio for banks, ie departure from the top-down model, the calculation of the capacity on the basis of debt to income,
- The possibility of a simplified calculation of the credit for installment obligations, the amount of which does not exceed twice the average wage. This rule will also apply to customers some time working with the bank. Easier to obtain the amount to three times the average salary so the chances are customers of the half-year experience of cooperation. For customers cooperating with the bank for a year, this limit was fixed at six times the average monthly salary in the enterprise sector.
The relaxation of the provisions of Recommendation T KNF may actually contribute to an increase in the availability of loans and help to reduce their cost. First a summary of the effectiveness of the changes will be possible only after the end of the three-month period to adapt to the new regulations of banks.