“That is not something banks could afford because… this case indicates very non-transparent behaviour by the banks with regard to tacit overdrafts, and I think (cancelling tacit overdrafts) would be too big a reputation risk,” Kwiatkowski said in a comment on the Croatian National Bank’s initiative to change regulations on overdraft to cap the interest rate on tacit overdrafts.
Bank clients in Croatia who use authorised overdraft have in the past two and a half years been charged HRK 350 million more than they should have, Jutarnji List daily reported in early August.
Clients using overdraft in their current accounts should be charged a maximum interest rate of 7.61% by their banks, however, banks have found a way to charge them close to 10%, without clients even being aware of it, the daily said.
Asked if there were grounds to sue banks and if they had mislead their clients, the attorney said that a decision on that could be made on a case-by-case basis.
“If a bank, having approved a tacit overdraft failed to inform its client of it and of the interest charged and the period during which it would be charged, there would be grounds to seek damages regarding the interest rate on overdraft,” she said.
Kwiatkowski noted that the central bank should have reacted sooner because authorised overdraft was almost no longer a bank product, with banks having approved only tacit overdrafts.
The state should have controlled banking transactions more regularly to see what banks were offering their clients, she said.
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