ROMANIA Law and Practice Contributed by: Sergiu-Traian Vasilescu, Luca Dejan, Bogdan Rotaru and Ana-Maria Bută, VD Law Group
highly customised, often including syndicated financ - ing and flexible repayment structures. While consumer loans follow strict rules, SME and corporate loans depend largely on bank risk policies, but all lenders must comply with the BNR credit risk regulations. 4.3 Sources of Funds for Fiat Currency Loans In general, loans in Romania are funded through bank deposits, lender-raised capital, securitisation and P2P lending, each with different regulatory implications. Bank Deposits Bank deposits are the main source for banks, strictly regulated under BNR rules, including reserve require - ments and deposit guarantees. Banks must hold a portion of deposits as reserves with the BNR, ensuring liquidity and financial stability. Depositors are protect - ed through the Bank Deposit Guarantee Fund, which guarantees deposits up to EUR100,000 per depositor Lender-raised capital, including bonds, equity and interbank loans, follows capital markets laws and BNR prudential regulations. The issuance of bonds and raising of capital through equity is regulated by Law No 297/2004, ensuring transparency and fairness in the capital markets. Interbank lending is governed by regulations that ensure liquidity and the solvency of financial institutions, with the BNR overseeing capital adequacy and risk management. Securitisation in case of a bank failure. Lender-Raised Capital Securitisation allows banks to sell loan portfolios to investors, freeing up capital for new loans. This pro - cess is regulated by Law No 31/2006, which sets the rules for structuring and issuing asset-backed securi - ties. P2P Lending P2P lending is emerging and is governed by the EU Crowdfunding Regulation (Regulation (EU) 2020/1503), providing a framework for platforms that match borrowers with lenders. While the regulation is relatively lighter in oversight compared to traditional banking, it includes increasing consumer protection
measures, requiring platforms to adhere to transpar - ency and risk-management standards. 4.4 Syndication of Fiat Currency Loans Syndicated loans are seen in Romania, especially for large-scale financing. The process involves lead arrangers or bookrunners who negotiate loan terms with the borrower and invite other financial institutions to join the syndicate. Each lender contributes a por - tion of the loan and shares in the risks and rewards. The loan’s terms are documented in a syndicated loan agreement. Syndicated loans in Romania are governed by the Romanian Civil Code, Banking Law, and EU regulations, with oversight from the BNR to ensure financial stability and compliance with Basel III requirements. 5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails Generally, payment processors in Romania or any - where within the EU must use existing payment rails, compliant with the EU’s PSD2 and Single Euro Pay - ments Area (SEPA) framework. However, payment processors could create new pay - ment rails or conduct on top of those already existing, with strict adherence to standard set regulations. This might include, but not be limited to, a seal of approv - al by regulatory authorities from national banks, for example in Romania, and licences. Any new payment infrastructure should also comply with the many strict requirements related to security, consumer protection and AML measures. This content within a new rail is required to provide for interoperability, on replicating the older payments facilities in a way that would not disrupt any existing payment ecosystem and maintain EU compliance. 5.2 Regulation of Cross-Border Payments and Remittances The overall regulations covering cross-border pay - ments and remittances in Romania, in line with EU regulations, include the PSD2 and the AML Directive, which are in place to ensure security, transparency
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