SAO PAULO, April 10 (Reuters) - Brazil's top lenders in July will begin suggesting to clients who heavily use overdraft credit lines that they transfer their debts to cheaper products, bank lobbying group Febraban said on Tuesday.
Overdraft credit, which totals 29.5 billion reais ($8.65 billion), is one of the most expensive credit lines in the country, with average annual interest rates higher than 300 percent, according to Brazil's central bank.
Transfers to cheaper products will be suggested to clients using overdraft lines for more than 30 consecutive days and above 15 percent of their limit. Banks will have to prove to the central bank they are giving clients that advice, as Reuters reported in January.
The rule of offering cheaper credit lines follows central bank efforts to reduce credit costs to consumers in a concentrated banking sector. This month, Brazilian central bank chief Ilan Goldfajn told Reuters he was counting on "self-regulation" to tackle wide banking spreads in overdrafts.
However, it remained unclear how much cheaper new credit lines for clients using overdraft will be. In a press conference on Tuesday, Murilo Portugal, executive president at Febraban said it was not possible to predict an average reduction since it will be defined by each bank.
State-controlled lenders Banco do Brasil SA and Caixa Econômica Federal and private lender Banco Santander Brasil SA said they will offer clients cheaper lines that they already have in their portfolio.
Other Brazilian top lenders such as Itaú Unibanco Holding SA and Banco Bradesco SA did not immediately respond to requests for comment.
$1 = 3.4093 reais Reporting by Carolina Mandl; Editing by David Gregorio