Banks Association criticizes new obligatory banking reserves regulations

Yesterday at the Fifth Banking Forum, representatives of the Polish Bank Association (ZBP) criticized the regulation. "The obligation is hardly understandable in the banking sector. The introduction of such regulations is not justified as it is a kind of punishment [for granting a loan]," said Mariusz Zygierewicz from ZBP. Banks are required to create a 0.5% reserve for all commercial loans. Between Jan. 1, 2000 and Jun. 30, 2000 the reserve will have to be 1.5% of the loan and from Jun. 30, 2000 the threshold is to be increased to 2% of the loan. Zygierewicz said that there is no need to create additional reserves for loans as banks already have all-purpose reserves which are enough. He added that by the end of 2000 the reserves would increase by zl. 328 million. (Prawo i Gospodarka, page 10)