The problem of currency-indexed loans: Case of 'CHF'

Abstract

Currency indexation entered the legal system of Serbia by changes of the Law of Contract and Torts in 1993 due to great economic movements and inflationary pressures. Law permitted contracting of loans in which the obligation can be tied to a foreign currency, so that the payment is done on the day according to the parity of that currency with the national currency. This form of currency indexation has a protective character, it should maintain the real value and equality of mutual giving between the contracting parties, but today, in case of 'CHF' it has become usurious and it seriously compromises the equivalent of mutual giving in the contract. In this paper the authors provide the analysis of creation and basic characteristics of problems of loans in CHF and based on the conducted research, suggest actual measures for overcoming the problems of more than 20 000 citizens of Serbia.

Keywords

• currency indexation
• chf
• serbia
• overindebtedness
• contract
• loan