BNB Allows Relaxation in Loan Payments Amid COVID-19 Outbreak
The Governing Council of BNB approved the procedure for deferral and settlement of liabilities payable to banks and their subsidiaries in the backdrop of COVID-19 pandemic. The document on the procedure for deferral and settlement of liabilities constitutes a private moratorium within the meaning of the EBA guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis. On April 03, 2020, the Governing Council of BNB had issued a statement on its decision to comply with the EBA guidelines.
Commercial banks that have accepted to implement the approved procedures for deferral and settlement of payable liabilities will publicly announce the proposed concessions on their websites, the banks’ public premises, and in any other appropriate manner. The approved private moratorium provides opportunities for changes in the principal and/or interest payment schedule of liabilities, without changing any key parameters of the loan agreement such as the already agreed interest. Liabilities may be deferred for a term of up to six months, ending on December 31, 2020. The deferred liabilities must have been regularly serviced or not more than 90 days past due as of March 01, 2020.
Customers should declare explicitly to their servicing bank that they wish to avail of the proposed concessions. Banks may also agree with their customers different individual deferral and concession schemes, other than the ones provided under this procedure. In such cases, banks may not avail of the temporary principle, implemented by the approved moratorium and following the EBA guidelines, that the deferral or concession does not result in classification of exposures in default or forbearance.
Related Links
Keywords: Europe, Bulgaria, Banking, COVID-19, Loan Moratorium, Credit Risk, EBA, BNB
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
ECB Updates Guidance on Reporting of Securities Holdings StatisticsRelated Articles
APRA Updates Validation and Derivation Rules in September 2020
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
EC Proposes Frameworks for Crypto-Assets and Operational Resilience
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB Publishes Opinion on Proposals to Amend Securitization Framework
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS Amends Notice on Capital Adequacy Requirements of Banks
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA to Begin to Move Firms to New Data Collection Platform RegData
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
ISDA Expects IBOR Fallbacks to be Effective by End of January 2021
ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.
APRA Reviews Repayment Deferral Plans, Identifies Best Practices
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs Assess Risks to Financial Sector After COVID-19 Outbreak
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE Confirms Withdrawal of COVID Corporate Financing Facility
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
