The Romanian Banking System
The National Bank of Romania
The Bank Deposit Guarantee Fund
The Credit Bureau
TransFonD
The Romanian Banking Institute
The Payments Incidents Bureau
The Credit Information Bureau
ROMCARD
The Romanian Banking System is a two-tier system, made up of the National Bank of Romania and credit institutions. This system was introduced in December 1990, being the first step of the banking reform process.
The legal framework governing the banking system consists of: Law on the Statute of the National Bank of Romania – Law no. 312 from 28 of June 2004; Ordinance regarding the credit institutions and the capital adequacy - Government Ordinance no. 99 from 6 of December 2006, Law for the approval of the Government Ordinance no. 99 from 6 of December 2006 - Law no. 227 from 4 of July 2007, Law for the privatization of banking institutions in which the state is shareholder – Law no. 83/21 of May 1997; Regulations on the bankruptcy of credit institutions – Government Ordinance no. 10 from 22 January 2004 on the bankruptcy of credit institutions, approved, supplemented and amended by Law no. 278/23 of June 2004; Government Ordinance no. 39/1996, on the organizing and functioning of the Bank Deposit Guarantee Fund.
The main characteristics of the banking system (as of December 31, 2009) are: - 42 credit institutions ( 2 banks with majority state capital, 4 banks with majority Romanian private capital, 25 banks with majority foreign capital, 10 branches of foreign banks, and a credit cooperatives network);
- 52,4 % of bank assets concentrated to the first 5 banks in the system;
- Credit institutions with majority foreign capital - 85,3 % market share;
- Credit institutions with majority private Romanian capital - 7,4 % (including the credit cooperatives network);
- Credit institutions with state capital - 7,3 %.
On the Romanian market, there are also operating non-bank financial institutions, such as mutual assistance funds, pawnshops, financial leasing companies, consumer credit companies, mortgage credit companies, micro-finance companies, companies involved in factoring, discounting and forfeiting operations, companies specialised in financing commercial transactions, and others.
^Up The National Bank of Romania (NBR), set up in 1880, is the central bank of Romania. An independent public institution, located in Bucharest, the National Bank of Romania is the only institution authorised to issue money - banknotes and coins - as legal tender on the territory of Romania.
According to the provisions of Law no. 312/2004 on the NBR statute, NBR’s main responsibilities are: devising and pursuing monetary policy and exchange rate policy; licensing, regulating and prudential supervising of credit institutions, promoting and monitoring the appropriate operating of payment systems in order to ensure financial stability; issuing banknotes and coins as legal tender on Romania’s territory; establishing the foreign exchange norms and its supervision; managing Romania’s foreign reserves.
^Up The Bank Deposit Guarantee Fund The Bank Deposit Guarantee Fund was set up in 1996, by Government Ordinance no. 39/1996, as a legal entity of public law. The Fund’s purpose is: guarantees the reimbursement of deposits with credit institutions by natural persons, legal persons or entities without legal personality, according to the terms and limits established by the law on the Fund’s operating; conducts activities as special administrator, interim administrator or liquidator of credit institutions, if appointed to act in such a capacity.
Since its setting up, the Bank Deposit Guarantee Fund together with the Romanian Banking Association representatives have had an active role in the drawing up and enforcement of regulations on the mechanism that guarantees deposits and payment of compensations to depositors, if a bank goes bankrupt.
RBA is represented by the President and the Secretary General in the Board of the Bank Deposit Guarantee Fund. ^Up The Credit Bureau Established following the initiative of the Romanian banking community, the Credit Bureau is a joint stock company which has as founding members 24 banks. In present, the Credit Bureau has as shareholders 27 banks. Having become operational in August 2004, the Credit Bureau currently manages negative and positive data, supplied by banks and non-banks.
The aim of setting up the Credit Bureau was to provide participants in the banking system real, updated, aggregated and consistent information regarding individuals who have loans with banks or non-banks, have purchased an asset via leasing or have been insured against default risk with an insurer.
The business of the Credit Bureau includes: Collecting / processing data on customer portfolios – individual customers of participants; Information and analyses offered to participants in order to identify and measure credit risk, better quality loans, fraud risk mitigation and loan protection; Establishing uniform criteria for scoring; Financial and banking consulting.
^Up TransFonD Following the specials efforts of the central bank and the banking community to conduct a structural reform of the payment and settlement systems in Romania, currently, Romania has a modern payment system, compatible with those of the European Union.
The operator of the Electronic Payment System of Romania is TransFonD – the Company for Fund Transfer and Settlement, a private firm established by the banking community of Romania, having as shareholders the National Bank of Romania (33,33%) and 25 commercial banks (66,67%).
The main line of business of TransFonD is to provide clearing and settlement services of cashless payments in national currency for credit institutions, the National Bank of Romania, the State Treasury and other financial institutions.
The main responsibilities of TransFond are: - to manage and operate the SENT (automated clearing house) system;
- the technical administration and the operating of the ReGIS (real-time gross settlement system) system, according to the mandate given by the National Bank of Romania;
- the technical operating of the SaFIR (system for deposit and settlement of government securities) system;
- to provide support services for the participants in the three systems.
^Up The Romanian Banking Institute The Romanian Banking Institute (RBI) has as main target vocational training, by specialising the staff working in banks, according to the requirements established by credit institutions and the National Bank of Romania, in cooperation with the Romanian Banking Association and the programmes endorsed by its Board.
The relationship and the collaboration of the Romanian Banking Association with the Romanian Banking Institute are conducted considering that the RBA is a founding member and a Board member of the RBI.
Lately, the collaboration with the Romanian Banking Institute has become stronger, due to the ongoing direct link of the Institute representatives with the experts of the specialised commissions of the Romanian Banking Association, where current topics are being debated for each segment of banking, out of which course, seminar and workshop requirements are being devised, subsequently organised by the Romanian Banking Institute for the employees working in the banking sector. ^Up The Payments Incidents Bureau Set up in 1997 inside the National Bank of Romania, the Payments Incidents Bureau is an intermediation centre managing information specific to incidents with payments instruments (cheques, promissory notes, bills of exchange), both from the bank's point of view (overdraft) and from the social point of view (lost/stolen/damaged). The information to Payments Incident Bureau is conveyed by computer system through the Interbank Communication Network, which links the head office of the National Bank of Romania to the head offices of all banks. ^Up The Credit Information Bureau The Credit Information Bureau was set up in 2000, in the National Bank of Romania, as an intermediation centre that manages credit risk information and card fraud information.
The system collects, stores and centralizes information on the exposure of every credit institution in the Romanian banking system to the debtors that were granted loans and/or have commitments totaling more than the reporting threshold, and on payments overdue, as well as information on card frauds committed by cardholders.
The users of the information in the Credit Information Bureau database are the reporting entities - credit institutions and mortgage loan companies - and the National Bank of Romania. The exchange of credit risk information shall be performed electronically, through the Interbank Communication Network. ^Up ROMCARD ROMCARD is joint stock company, set up in 1994 by the five most important Romanian banks, having as objective the processing of cards transactions.
ROMCARD provides services regarding cards transactions, its domain of activity including cards transactions authorization, databases administration, national and international switching, cards transactions processing and settlement, security solutions for e-commerce services. ROMCARD processing system is realized and certified in conformity with the international standards. ^Up
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