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SAO PAULO, March 14 (Reuters) - Interest rates for rolling over credit card debt in Brazil may fall by up to 50 percent under new rules, an industry group head said on Tuesday, as banks respond to pressure from policymakers to ease the burden on domestic borrowers.
Brazilians pay the highest interest rates among the world's top 20 economies. President Michel Temer unveiled a plan in December to slash interest rates on credit card debt to alleviate pressure on consumers in the midst of Brazil's deepest recession on record.
The president of industry group Abecs, Fernando Chacon, said he expects average interest rates on rollover credit lines to fall from an annual rate of around 406 percent to around 181 percent, the same level charged on secured credit paid by installment.
The largest lenders, Itaú Unibanco Holding SA, Banco Bradesco SA and state-controlled Banco do Brasil SA, have already announced interest rates reductions.
"The new rules will probably reduce the high delinquency in the revolving credit lines", Chacon said, noting that the fall in delinquency rates would compensate for banks' lost revenue from lower interest rates.
Delinquencies on revolving loans surpass 35 percent of outstanding credit in the segment at present.
The central bank has been pressuring banks to reduce the timeframe between purchases and payments to retailers, which reach up to 30 days currently.
Rules to reduce the time between the transaction and payment to stores are under discussion and no decision has been made, Chacon said.
Crossed subsidies within the credit card industry should be addressed before changes in the payment period, Chacon said.
Abecs believes credit and debit card transactions in Brazil could grow by more than the 6.5 percent originally forecast this year due to an improving economic outlook, Chacon said. (Reporting by Tatiana Bautzer; Editing by Daniel Flynn and Grant McCool)