The MNB published the formulas approved for calculating the indicators and rates, which affect retail loans, on its website. The fair banks legislation, approved by Parliament in November, locks in interest rates for loans under three years and requires lenders to use indicators, approved by the central bank, to calculate rate changes for loans with longer terms.
The indicators ensure that changes lenders make to retail loans are transparent and comprehensible to their clients, as well as being proportional and symmetric, the MNB said. Banks may pick between formulas to calculate their indicators, but the client has the option to request that an alternative be used or turn to another lender.
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