Statement from the NBS Bank Board’s 24th meeting of 2019
The Bank Board of Národná banka Slovenska today (17 December) held its 24th meeting of 2019, chaired by NBS Governor Peter Kažimír.
The Bank Board took note of NBS’s December 2019 Monthly Bulletin, which will be published on the NBS website.
The Bank Board took note of NBS’s December 2019 Medium-Term Forecast (MTF-2019Q4) and approved the Opinion of the Bank Board on MTF-2019Q4. Both documents will be presented at a press conference and published on the NBS website.
The Bank Board approved two Decrees of Národná banka Slovenska:
- Decree No 9/2019 of 17 November 2019 amending Decree No 10/2017 of Národná banka Slovenska laying down detailed provisions on the assessment of borrowers’ ability to repay consumer loans, as amended by Decree No 6/2018 of Národná banka Slovenska; and
- Decree No 10/2019 of 17 November 2019 amending Decree No 10/2016 of Národná banka Slovenska laying down detailed provisions on the assessment of borrowers’ ability to repay housing loans, as amended by Decree No 7/2018 of Národná banka Slovenska.
The main purpose of the Decrees is to protect banks’ customers from risks associated with excessive borrowing and thus to reduce the negative impact of any potential economic downturn on households. In order to mitigate the risks associated with retail loan growth, which may be further accentuated by the return to monetary policy easing, it is proposed to reduce the limit on the debt-service-to-income (DSTI) ratio from 80% to 60%, while at the same time providing for some exemptions.
Under the new regime, 5% of new housing loans may have a DSTI ratio of up to 70%. In the original proposal presented for an inter-ministerial consultation exercise, this exemption applied only to loans to young borrowers, but now it applies to all new housing loans. For the first three months of 2020 the exemption will be increased, so that up to 15% of new loans may have a DSTI ratio of up to 80%.
Another difference from the original proposal is that the exemption allowing 5% of new loans to have a DSTI ratio of up to 70% will apply also to consumer loans with a term of up to five years. This is without prejudice to other exemptions currently applicable to consumer loans.
The Decrees take effect on 1 January 2020.
The Bank Board approved the National plan for the implementation of instant payments in the Slovak Republic (‘the Instant Payments Implementation Plan’), which was produced as a collaborative effort of Národná banka Slovenska, the Slovak Banking Association, the State Treasury of the Slovak Republic and the Ministry of Finance of the Slovak Republic. The document sets a deadline (1 February 2022) and conditions for the implementation of instant payments in the Slovak Republic. Instant payments are defined as payment solutions available to banks’ customers 24 hours a day, 365 days a year, which allow payments to be credited to the payee’s account within ten seconds after the payer’s bank initiates the payment. The maximum amount of such transactions is currently set at €15,000 and will be increased to €100,000 as from 1 February 2020.
The Instant Payments Implementation Plan will be published on the NBS website.
Head of the Communications Section
National Bank of Slovakia
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