SAO PAULO, March 29 Changes to Brazil's credit
card lending and receivable prepayment practices have to be
implemented gradually so as to not derail an economic recovery
while cutting borrowing costs in a sustainable manner, a top
central bank official told Valor Econômico newspaper in an
interview published on Wednesday.
Reinaldo Le Grazie, the central bank's head of monetary
policy, told Valor that steps to reduce the timetable for banks
and card payment processors to settle receivable prepayments
with retailers "have appeared more complex than we all initially
Cutting that timetable from a 30-day period currently "has
to be done gradually so as to keep the industry in equilibrium,"
Le Grazie told Valor. Scrapping cross subsidies that benefit
consumers and payments processing firms at the expense of
retailers remains a "complex task," he told Valor.
His remarks underscore the central bank's careful approach
towards changing market rules for financial companies that serve
consumers and companies with payment processing and settlement
Recent measures allowing banks to substitute credit card
rollover loans with secured, parceled-out loans will cut
borrowing costs on the segment by half, he told the paper. The
average monthly rate on a credit card revolving loan is 16
percent, three times the level in other Latin American markets.
Apart from wanting banks and payment processors to slash the
period during which they reimburse retailers for their card
sales, President Michel Temer's administration wants the gradual
end of interest-free installments on card purchases, and a
faster implementation of positive credit bureaus.
Earlier this month, Brazil's top lenders, led by Itaú
Unibanco Holding SA, announced reductions in the
rates they charge on rollover credit card loans to comply with
the new rules.
The central bank's press office did not immediately confirm
the content of Le Grazie's interview with Valor.
(Reporting by Guillermo Parra-Bernal; Editing by Chizu