The Zagreb Commercial Court on Thursday delivered a ruling in favour of the Consumer Protection Association that sued eight banks relating to the Swiss franc foreign currency clause and their unilateral decision to increase interest rates.
The judgement was handed down by Judge Radovan Dobronic exactly one year after the first preparatory hearing in this case was held.
That preliminary hearing was held on 4 July 2012 and the class action against Zagrebacka Banka, Privredna Banka, Erste Bank, Raiffesenbank, Hypo Alpe-Adria-Bank, OTP, Splitska Banka, and Sberbank was granted in December.
Explaining the ruling, the judge said today that the banks had violated consumers' rights when they failed to fully inform them about all parameters necessary to decide on taking loans.
The judge also finds unilateral decision to increase interest rates as an act of violating collective interests and ordered the banks to convert loans' capital sum into the kuna according to its exchange rate on the day of the conclusion of loans with fixed interest rates.
However, loan-takers can ask for refunds only by launching their individual proceedings for this purpose.
This is the first suit of this kind in the history of Croatia's judicial system.
According to the Franak nongovernmental organisation, more than 100,000 clients have loans pegged to the Swiss franc, of which 75,000 are housing loans, and in some cases repayment rates have increased from 35% to 100%.
The trial began in March, with the judge saying the currency clause was allowed but that its application should be an exemption and not a rule. He also wondered about the justification of introducing the clause at a time when the kuna was more stable than the Swiss franc or the euro.
