Amendments to the Rules on Price Indexation of Savings and Loans
The Rules on Price Indexation of Savings and Loans, no. 877/2018, have been amended and reissued as the Rules on Price Indexation of Savings and Loans, no. 218/2023. The new Rules were published on the Law and Ministerial Gazette [Stjórnartíðindi] website today and will take effect on 1 June 2023.
Repeal of provisions on commitment period for indexed deposits and term of indexed loans
The amendments provided for in Rules no. 218/2023 primarily entail the repeal of current provisions on the commitment period for indexed deposits and the term of indexed loans. According to Article 2 of the current Rules no. 877/2018, credit institutions are authorised to accept savings for indexation to the consumer price index only if the deposit is subject to a commitment period of 36 months or longer, with further specified exceptions. Furthermore, Article 3, Paragraph 1 of the current Rules states that price indexation of loans is permissible only if the loan term is at least five years, while Paragraph 4 of the same Article provides for an exemption for indexed Treasury securities. In the Central Bank’s assessment, the original grounds for such requirements concerning commitment period and term of indexed deposits and loans no longer apply, and the new Central Bank Rules on Price Indexation of Savings and Loans reflect this.
With the entry into effect of Rules no. 218/2023, Article 2 of the current Rules, which covers commitment periods for indexed deposits and specified exemptions from such commitment periods, is repealed. Also repealed are the provisions of Article 3, Paragraphs 1 and 4 of the current Rules, which cover the term of indexed loans and exemptions from minimum maturities for indexed Treasury securities.
In addition to the above-described amendments, the wording in Article 3 of the current Rules has been honed and further elaborated; cf. Article 2 of Rules no. 218/2023.
Finally, Article 4 of the current Rules, on the authorisation to index loan agreements to share price indices when they do not represent consumer loans or consumer mortgages, has been deleted, in part because a comparable provision can be found in Article 14, Paragraph 2 of the Act on Interest and Price Indexation, no. 38/2001. The deletion of the provision in the Rules therefore does not entail a restriction on this authorisation.
The text of Rules no. 218/2023 can be found here.
7 March 2023