The official gazette published yesterday, with the date of August 14, the Law on the conversion of loans in Swiss francs into euros, which is eagerly awaited by the users of these loans.
The law enters into force on the eighth day from the day of its publication, that is, on August 22.
The Central Bank of Montenegro has a deadline of 30 days from the date of entry into force to draft by-laws and regulations on the supervision of banks during this procedure.
The only bank that granted loans calculated in Swiss francs is Hypo Alpe Adria, which is obliged to convert all loans granted in Swiss francs into euros within 30 days from the date of entry into force of the law at the official exchange rate on the day the contract was concluded according to to the Central Bank exchange rate. This obligation also applies to loans terminated by the bank because the customer did not pay installments on time. The basis for loan conversion is the amount that the client received from the bank at the time of concluding the contract.
After converting the loan into euros, the bank is obliged to perform a new calculation of the loan with a fixed interest rate of 8,2 percent on an annual basis.
As stated in the law, the bank must offer this new calculation to loan users within 45 days from the entry into force of this law.
The Central Bank supervises the implementation of this law, which, together with the Ministry of Finance, was against this law. It was adopted by the Assembly on July 31, on the proposal of the Democratic Front MP, by the votes of the opposition and part of the SDP and minority parties. President Filip Vujanović signed it on August 10.
Representatives of the associations of users of these loans, of which there are about 600, collaborated in the preparation of the law and believe that it will be easier for them to return the remaining debt because they will have a fixed amount of the remaining principal and the value of the installment that will no longer depend on the exchange rate of the franc in relation to the euro.
Due to major changes in the exchange rate to the detriment of the euro, in the past years, regardless of the repayments, the amount of the principal increased and the installments were twice as high.
Hypo Alpe Adria Bank announced that it will act according to the law and by-laws prepared by the Central Bank and that it will not ask the Constitutional Court to assess the constitutionality of that law.
Unprofitable new calculation for loans with a longer repayment term?
According to unofficial estimates, due to the significantly higher new fixed interest rate of 8,2 percent compared to the previous one per franc, which was almost twice as low, users of loans with a shorter repayment period of up to 10 years will have a greater debt reduction. Those who had a repayment period of 10-15 years, the amount will be approximately the same, with the advantage that it will be fixed.
Users who took a loan for 20 years or more, the amount according to the new calculation could be higher compared to the previous one. According to unofficial estimates, these loans make up a little more than a third of the total number.
One of the ambiguities is what if the client does not accept the new calculation because the bank has an obligation to perform the conversion.
In recent weeks, the Swiss franc stopped growing and even saw a slight decline. The Swiss authorities announced that they are analyzing the re-freezing of the exchange rate of their currency, because due to the growth, the products of their economy are losing competitiveness on the foreign market.
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