Citizens Beat The Banks In Landmark Court Ruling In Croatia

A Croatian court has ruled that 8 international banks have mislead borrowers by not explaining clearer risks of taking out loans in Swiss francs with variable interests rates.

Zagreb commercial court Judge Radovan Dobronic handed down his decision on Thursday against the local branches of 8 international banks. In his summing up Dobronic said that the banks were in violation of consumer-protection laws by not informing clients about all the ins and outs of taking out the Swiss francs loans with variable interest rates and that they created a ‘imbalance in the rights of contractual parties’.

The landmark decision is set to cost the banks a total of just over 3.1 billion USD, according to Banka Magazine. Croatians had taken out around 75,000 loans in the Swiss francs currency with the accused banks, which included Privredna Banka, a unit of Intesa Sanpaolo SpA,  Zagrebacka Banka, which are part UniCredit SpA, Erste, Raiffeisenbank, Hypo Alpe-Adria-Bank, OTP, Splitska banka and  Sberbank. Both parties have the right of appeal.