ZAGREB, March 28, 2019 – The Supreme Court said on Thursday that decisions by banks on the variable interest rate on loans pegged to the Swiss franc in the period from 1 January 2013 to 1 January 2014 were unlawful because banks had not adjusted their operations concerning variable interest rates to the amended Consumer Credit Act.
“Even though in order to correct the invalid provision, banks had specified in their offer to clients, in line with the law, the way the variable interest rate would be set, they unilaterally and contrary to the law, set an interest rate that was higher than the initially agreed interest rate,” the Supreme Court said.
It said that because banks charged an interest rate that was higher than the one initially agreed to clients’ demands to be refunded for the overpaid amount were justified.
The court said that its latest decision did not change its conclusion of 20 March 2018 that a class action discontinued the statute of limitations on claims by individual clients.
The Franak association, which brings together holders of loans previously pegged to the Swiss franc and converted to euro loans, and the SNAGA party in January called on the Supreme Court to deliver a ruling as soon as possible on bank audits in relation to loan holders’ right to compensation following loan conversion, considering the fact that the statute of limitations on their claims for overpaid interest expires in June this year.
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