The Zagreb Commercial Court on Monday upheld a suit by the Consumer Protection Association against eight banks relating to the Swiss franc foreign currency clause and their unilateral decision to increase interest rates but rejected the suit relating to demands to amend contractual obligations and the principle loan amounts to be pegged to the euro.
The court ordered that the prosecution forward the contentious contracts and the advertisement for loans tied to the Swiss franc to each of the banks individually within 15 days.
The Consumer Protection Association is required to note for each individual bank whether the bank offered loans only in Swiss francs or whether they offered the choice of taking a loan in kuna or euros.
Each of the parties in the trial including the eight banks - Zagrebacka, Privredna, Erste, Raiffeisenbank, Hypo Alpe-Adria-Bank, OTP, Societe Generale-Splitska Banka and Volksbank have until the end of January next year to submit their arguments.
It is expected that the trial will be set to start in February and the possibility exists that once a ruling is passed, banks may be ordered to convert the said loans into the kuna.
This is the first suit of this kind in the history of Croatia's judicial system.
The prosecution claims that the banks acted unfairly and non-transparently and did not warn clients about the possible risks of these loans.
The Franak nongovernmental organisation had earlier filed a suit against the banks, but this was rejected by the court. Franak notes that 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%.
