At the session of the Executive Board of the National Bank of Serbia held on July 27, 2020, two decisions have been adopted:
- The Decision on temporary measures for banks to mitigate the consequences of the COVID-19 pandemic to preserve the stability of the financial system.
- The Decision on temporary measures for financial lenders to mitigate the effects of the COVID-19 pandemic to preserve the stability of the financial system.
These decisions were published in the Official Gazette of RS No. 103/20, from July 27, and they enter into force on the day following the day of publication, i.e. July 28, 2020.
The moratorium applies to obligations based on:
- Bank loans and credit products (such as minuses and credit cards);
- As well as other bank products (such as liabilities under interest rate hedging instruments related to loans and / or credit products, bank guarantees).
The moratorium does not apply to obligations for payment services (e.g. transaction commission, account maintenance fees), investment services, broker-dealer operations, safe deposit box services, etc.
In accordance with these decisions, debtors will be provided with another delay in the repayment of liabilities to banks and financial leasing entities which will mature in the period from August 1, 2020 to September 30, 2020, as well as a delay in the repayment of liabilities due in July this year, which have not been settled.
1. The Offer
Banks and financial leasing providers are obliged to offer a delay in repayment of obligations to individuals, farmers, entrepreneurs, and companies by July 31, 2020.
The notice on the offer of the bank and the financial leasing provider will be published on their websites, and contain information on the beginning of application and duration of the moratorium, calculation of interest, method of repayment of obligations after the moratorium, possible alternative methods of repayment, as well as a representative example. and after the end of the moratorium
If the debtor does not reject the offer within ten days from the day of publishing the notice of the offer, it shall be considered that he has accepted the offer.
2. The Calculation of Interest
Regarding the calculation of interest, during the moratorium the bank / lessor calculates the regular (agreed) interest.
The bank (lessor) calculates the regular (agreed) interest on the outstanding debt (which does not include liabilities due during the moratorium), and the interest calculated in this way corresponds to the amount of regular interest in accordance with the repayment plan valid before the new NBS decisions came into force.
Notwithstanding the above, if the debtor is a company, the bank / lessor may charge regular (agreed) interest on the principal amounts of the debt that fall due during the moratorium.
3. Termination of the Moratorium
Upon termination of the moratorium, the regular interest calculated in the aforementioned manner is evenly distributed over the loan repayment period and other bank products, i.e. the lease repayment period, and is not attributed to the debt principal, and the repayment period is extended for the moratorium period.
The decisions also regulated other issues, as follows:
- Waiving the moratorium;
- The calculation of interest;
- Obligation to compile and submit a new repayment plan;
- Regulation of internal acts of banks and lessors (within five days from the date of entry into force of new decisions);
- Obligation of banks and lessors to submit to the NBS reports on implemented activities and measures taken in accordance with new decisions – special forms have been are prescribed for these purposes;
- The impact of the moratorium on administrative bans, etc.