The Romanian Competition Council has launched an investigation into some of the country’s commercial banks for suspected anti-competitive practices. The authority raided the premises of several banks on September 6, looking for evidence of possible collusion regarding the reports they submit to the Credit Bureau.
What is the Credit Bureau and why does it matter?
The Credit Bureau is a private institution that collects and processes information about the credit history and behavior of individuals and legal entities who have or have had loans from banks or non-banking financial institutions. The Credit Bureau’s database is used by lenders to assess the creditworthiness and risk profile of potential borrowers, and to set the interest rates and conditions for granting loans.
According to the Competition Council, the banks under investigation may have agreed on the criteria and methods of reporting to the Credit Bureau, in order to influence the credit scoring and the access to financing of certain categories of customers. This could have distorted the competition on the credit market and harmed the consumers’ interests.
Which banks are involved and how did they react?
The Competition Council did not disclose the names of the banks that were subject to the unannounced inspections, but some of them confirmed their participation in the investigation. Among them are Banca Transilvania, BRD – Groupe Societe Generale, Raiffeisen Bank, CEC Bank, OTP Bank, Garanti BBVA, and UniCredit Bank.
The banks stated that they are cooperating with the authorities and that they comply with the legal provisions regarding competition and consumer protection. They also claimed that they report to the Credit Bureau in accordance with the regulations and standards of the institution, and that they respect the confidentiality and security of the data.
How long will the investigation last and what are the possible consequences?
The Competition Council said that the investigation is in its early stages and that it does not imply a violation of the competition law by the banks. The authority will analyze the documents and information obtained during the inspections and will decide whether there is enough evidence to open a formal probe or to close the case.
If the investigation confirms the existence of a cartel agreement among the banks, they could face fines of up to 10% of their turnover in Romania. Moreover, they could also be sued by customers who suffered damages as a result of their anti-competitive practices.
The Competition Council is an independent public institution that monitors and sanctions anti-competitive behavior on the Romanian market. The authority has previously investigated other sectors such as energy, telecom, retail, pharmaceuticals, and transport.
