The new regulation for financial institutions, drafted by Romania’s National Bank (BNR), is likely to lead to a 10-12 percentage points slowdown in lending by the end of the year, according to BNR officials.

The new regulations are aimed to curb lending for individuals, especially, and to lower risks for both banks and clients, BusinessStandrad.ro reports.

The new regulations, to be enforced in October, are to set the maximum debt degree to some 55 percent of the clients’ income, as opposed to a maximum 70 percent level currently.

“The new regulations’ impact will vary from one bank to another, depending on their risk profile,” BNR’s Financial Stability Department Manager, Ion Dragulin, told news agency Newsin.

Furthermore, the regulations will have different impact on banks sub-portfolios, depending on the loan maturity, type of credit - consumer or mortgage, and currency, Dragulin added.

Commercial banks have already started discussions with BNR regarding their new lending norms, the manager added.