Komercni banka fined CZK 7.5 million for breach of mortgage rules

The Czech National Bank (CNB) imposed a CZK 7.5 million fine on Komercni banka (KB) for a breach of the consumer loan law relating to early mortgage repayment, according to a decision issued by the bank.

Under the decision, KB failed to reduce the overall costs of consumer loans of 1,116 clients, who applied for an early repayment of housing loans between mid-March 2019 and mid-July 2020 and made the payments, by interest and other costs. If there was no early repayment, those costs would have to be paid. The interest costs amounted to CZK 12.89 million, the CNB said.

KB has to pay the penalty no later than within 30 days from June 10, which is the day the decision took legal effect, according to the CNB's website.

Early this year, building society Modra pyramida, part of the KB group, was given a CZK 5 million fine for a similar transgression.

KB is convinced that its approach is in line with the explanatory report on the law, Seznam Zpravy said. KB did not rule out taking the case to a court.

"We know the CNB has held a different view in the long run," announced KB spokesman Pavel Zubek. That is why KB thinks that only an independent court and its binding opinion can resolve the problem," he added.

The CNB made a decision on KB's fine in mid-February this year. Last week it dismissed the appeal and confirmed its previous decision.

KB, a leading bank in Czechia and in Central and Eastern Europe, is 60.4 percent owned by France's Societe Generale.

Source: Seznam Zpravy and CTK