SETTLEMENT OF A LOAN SUBJECT TO FOREIGN EXCHANGE RISK AFTER ELIMINATION OF THE INDEXATION MECHANISM ACCORDING TO COURT RECOMMENDATIONS
Keywords:foreign currency loan, index-linked loan, 'de-franking' of a loan agreement
By 2017, nearly one million foreign currency risk loans (indexed to foreign currencies or denominated in foreign currencies) were concluded, and their value reached nearly PLN 200 billion in 2011 (according to data from the Credit Information Bureau, 899 000 people had a loan in CHF by mid-2022). In 2008, an economic crisis arose, which resulted, among other things, in the depreciation of the złoty against foreign currencies. As a result, some borrowers, despite several years of systematic loan repayment, had a debt (capital to be paid) in PLN that was greater than the amount of the loan taken out and, in some cases, even exceeded the value of the real estate, which constituted security for repayment of the loan taken out.
The above facts have contributed to the decision of some borrowers to apply to the courts against the banks that granted them an unfavourable loan in a foreign currency (mainly in CHF), claiming the invalidation of the agreement or an alternative claim consisting in the settlement of the loan after the elimination of the indexation mechanism to a foreign currency in its entirety (the so-called 'de-franking' of the agreement). If the credit agreement is invalidated, the parties must settle the sums of money transferred to each other under the invalid agreement. In the second solution, however, there is a need to settle the credit indexed (denominated) to the CHF currency after the elimination of the indexation mechanism in its entirety.
The settlement of the example loan agreement, assuming that both the initial loan balance and the individual loan instalments were not converted into CHF and that the loan would bear interest at the bank's rate and margin indicated in the agreement, will result in an overpayment of the loan on the part of the borrower. In contrast, on the part of the bank, there will be a liability to the borrower, which will be charged to operating costs and thus hurt the financial result. In addition, it will reduce the balance of the loan (the bank's receivables), and the amount written off will also adversely affect the financial result and contribute to the deterioration of the bank's property and financial situation.
Kowalewska E., Repayment of loans denominated or indexed in a currency other than the Polish currency, Finanse, Rynki Finansowe, Ubezpieczenia No. 5/2017 (89), Szczecin, 2017.
Analysis of current issues relating to franking credits. Study of the Financial Ombudsman. Warsaw, 2022.
Banking Act of 29 August 1997 (Journal of Laws 2017, item 1876, as amended);
Protecting the rights of consumers with foreign exchange risk loans. A study by the Supreme Chamber of Control. Warsaw, 2018.
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