Banks fight for Romanians' money using unorthodox metods

In a period in which the subject of the financial crisis started to be debated even on Sunday at the church, when the new norms of credit direct the banking market in a much expected normality and the European officials seem to be more preoccupied than ever to bring order in this sector, the Romanian banks pay more and more attention to the money of Romanians. Step by step, they increase the interests for deposits, either it’s about leu or currency, and the entire marketing policy is at the moment directed for drawing in money from the population.

If till a month or two ago the credits were the main goal of the marketing campaigns, starting with a few weeks ago the banks focused on drawing in the savings of the population, for long term. The sites of the banking institutions are full of promotions for deposits and in their customer-rush some banks even infringe the law. It is like when they dress up a deposit with a coat of current account and they promise that they won’t retain the tax on interest. Moreover, some of them adventure in making this type of promises even in the case of the so-called deposits. Beside the increase of interest rates, the banking institutions also offer the most sophisticated bonuses. Despite all these, the presentation of these products is very difficult of being understood, and in conclusion the ordinary Romanians chose the classical methods for protecting their savings. For example, Banca Comerciala Romana (BCR) has introduced a few days ago in its offer a structured deposit, with option, and the output will be calculated depending of the gold’s quotation evolution on the market from London. The deposit is set up for a maturity of six months, and in the sale period, with a length of seven days, the bank pays an interest rate of 8% yearly. When this term ends it starts the existence period, when the interest rate is as bonus, calculated depending of the evolution of gold’s price. The bonus results by applying a share which represents 30% deriving from the percentage difference between the quotation from 15.00 hour of the London market from the beginning of the existence period and from the end of the existence period. An obscure formula, that seems to have persuaded, at least at the beginning, only the big customers. „If the price for gold decreases, the customer receives back all his money”, concludes the executive director of the Direction for Development, Businesses and Retail Products BCR, Sorin Mititelu. A calculation made by the officials of the banks shows that to an increase of the gold price with almost 20% it will mean the application of an output on the deposited sum of 5,98%, which means an annual interest rate of 12%. In what concerns the interest rate for classical deposits in lei, it varies depending on the sum from 9,5% yearly to mostly 10,5%.

When they don’t resort to solutions difficult of being discerned, the banks fight harsh for proving that they practice „the best interest rates” from the market. The won title, in the own meaning of Millennium Bank, which has announced recently that pays interest rates of 11% yearly for the current accounts in lei and 5% yearly for the current accounts in euro, both included, obviously in a package of products that includes also two debit cards with overdraft. „At the moment, Millennium Bank offers the best interest rates from the market applied to one current account in lei and euro”, Eliza Erhan , director of the department of Development Products for Natural Persons, stated. Alpha Bank also struggles for a piece from the savings of the customers. For this it has on roll a promotion with progressive interest rate for deposits on 12 months that starts from 5,50% for lei in the first month and reaches to 17,25% in the last month. The re-cipe is in force also in the case of euro, the start being of 2% and the maximum of 9,80%. BancPost is the most aggressive when it comes about the money of the Romanians, so the promotions take place under the slogan „the best solution for saving - 9% interest rate to balance”. Obviously that we are speaking of a sophisticated product which „begins from the first leu” and that doesn’t arrive alone, but with a card of….debit this time, which at his turn comes with a list of commissions. In order that the image to be complete, also Raifeissen Bank directs its strategy towards the money of Romanians. However, this time we have to face with a „Guaranteed! Top 3 interest rates for deposits” which obviously comes in a package with the chance of winning 100 euro daily plus a trip to Vienna. As for the interest rate, this is of 10% to a deposit of 150 lei on three months and of 11% for 40.000 lei in the same period.

One of the methods used for persuading the customer is the one in which the customer is informed that the tax on interest won’t be retained, although the legislation states the contrary. Even in the condition in which this tax is supported by the bank, this had to be mentioned in an explicit way. For example, Volksbank has on its site a new promotion for the „Dynamic Deposit” with a variable interest rate one of the facilities promised being that „it isn’t retained tax on interest”. Also other banks stake on the success of this type of advantage, but for this dresses the deposits in various formula of current account, trying so to squeeze in near the law. Despite all these promotions, the Romanians are being skeptical when it comes about their money. The data presented by BNR show that, in August the population didn’t deposit in bank, not a single leu.

Not even the interest rates with two figures offered for the economies in national currency didn’t persuade the Romanians to make savings. In the statistics of the Central Bank from August appears the figure zero at the deposits in national currency by the natural persons.

Beside the fact that was a holiday period, the experts believe that it turned up a type of precaution especially related to the national currency. Not the same can be stated about currency. The statistics show an increase of the savings in foreign currencies with 3,1% against July.

The BCR representatives sustain that the tension that has turned up lately on the financial markets was reflected in the liquidation of some products of small value, and also in the customers’ orientation towards the deposits on term. Moreover, it was noticed that the big customers chose to regroup their savings on certain banks and to invest in more safe instruments, such as gold or public bonds.

During the last weeks, not few were the situations in which the BNR officials have stated public that the deposits in the Romanian banking system are sure, because no bank faces trouble with liquidity, and the withdrawals based on rumors are a mistake, especially because BNR is prepared to support the banks.

The Director of the Supervision Direction, Nicolae Cinteza has admitted that because of the rumors that appeared lately, it was noticed a tendency in increasing the withdrawals.

Cinteza agreed that the devaluation of the leu could determine a part of the deponents to make withdrawals but consider that these have made a wrong calculation. „I wouldn’t withdraw lei for buying currency at this level of course”, Cinteza added .

The limit for guaranteeing the deposits set up by population to the banks was increased from 20.000 euro to 50.000 euro starting with October 15, 2008, for minimum one year, according to an emergency ordinance approved by the Government. Two days after this decision was taken, the European Union has taken into account the increase of the limit up to 100.000 euro. The reason: increasing of the population trust in the banking system. The governor of BNR, Mugur Isarescu précised that in one of its intervention that 99,2% of the deposits from Romania are under 20.000 euro, précising that it wasn’t necessary the increase of the limit for guaranteeing the deposits, but that it is the duty of the authorities to line up to the European regulations. The deposits over 20.000 de euro, although represent only 0,8% of the number of deposits in banks, totalize as value 40% of the total of savings, also added the governor of BNR.