Member Article

The new rule establishes a scale of percentages to calculate the default rate of up to 10% in credit operations. The settlements will be made only for the amount due of principal and only from the date of non-payment until the day of fulfillment of obligations.

The previous rules while establishing a default interest surcharge of up to 10% depending on the payment behavior of customers, banks always considered their settlements maximum rate of 10%, although they could charge less attention to the days of delinquency only.

With the new rule addresses the risk profile of customers and the practice of payment behavior. That is, a good customer who regularly demonstrates an ability and willingness to pay, a feature evident in risk ratings that give financial institutions, will benefit from the reduction of punishment which means a default rate.

Just the opposite happens with clients that do not meet its obligations on time, because if the arrears of debt exceeds the standards of good behavior, applies the rate of 10% as punishment.

With the measure, the Central Bank of Ecuador, recognizes the features of paying customers of the financial system is stimulated to better handle the prompt payment and discourages a culture of non-payment.