Big Deposits of Companies in Bulgaria are Charged with Negative Interest Rates

The problem of negative interest rates directly damages the business in our country. Big banks in Bulgaria have been getting a hefty "fee" for about a year to maintain large corporate deposits, it is clear from their tariffs, a Mediapool check shows.

Bankers explain the change with decisions of the Bulgarian National Bank (BNB), which are, however, in fact, the result of the policies of the European Central Bank and international markets. Since the beginning of 2016, the BNB has been collecting negative interest rates on banks' over-reserves, which was initially -0.4%. However, in October 2017, the percentage was changed to -0.6%. Similar fees are also levied on government accounts with the BNB, including the Silver Pension Fund, which has been deposited at around -0.20%. The result is a paradoxical situation in which the BNB is currently profiting from the yield on its liabilities (that is, negative interest rates on excess reserves and accounts) rather than on its assets (investments in foreign government securities). In 2018, the central bank lost BGN 60 million in government securities investments but earned EUR 18 million in negative interest rates and EUR 46 million in gold revaluation.

The big banks were quick to respond to the new BNB levy, introducing a salt cap for large corporate deposits of 0.60% in the spring of 2018. The 'cash storage fee' in question plays the role of a negative interest rate which cannot be legal.

The largest bank in Bulgaria - UniCredit Bulbank - collects a "fee" of 0.60% per annum on corporate deposits for the excess of more than BGN 3 million, it is clear from its tariff. For the funds over BGN 2 million, it is 0.60% on an annual basis and for the excess over BGN 10 million, it is 1%. DSK Bank's monthly ...