SAO PAULO, March 29 (Reuters) - 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 thought."
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 services.
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 Nomiyama)