Featured Product

    HKMA Announces Principal Payment Scheme for SMEs Affected by COVID-19

    April 17, 2020

    HKMA, in consultation with the Banking Sector Small and Medium-sized Enterprise (SME) Lending Coordination Mechanism, has developed a Pre-approved Principal Payment Holiday Scheme. In this scheme, participating institutions will pre-approve deferment of loan principal payments falling due between May 01, 2020 and October 31, 2020 for eligible small-to-mid-size corporates for up to six months. In accordance with the HKMA loan classification guidelines, deferments of principal payments under the scheme will not by themselves render a loan account to be downgraded to a lower category.

    HKMA expects all authorized institutions to participate in the scheme under the same terms. The 11 major lenders in the Banking Sector SME Lending Coordination Mechanism, which together account for over half of the total bank lending in Hong Kong, have confirmed their participation in the scheme. The scheme is intended to provide immediate relief to small and medium corporates affected by the COVID-19 outbreak. All corporate borrowers that have an annual sales turnover of less than or equal to HKD 800 million and that have no outstanding loan payments overdue for more than 30 days are eligible for the scheme. Authorized institutions should ensure that they dedicate sufficient resources to implementing and operating the scheme. The terms of the scheme have been set out in the Annex to the circular. 

    Applications by borrowers are not required so that financial relief can be provided to corporates in the timeliest manner. For corporate customers that are not currently covered by the scheme or have payment falling due before May 01, 2020, HKMA expects authorized institutions to proactively reach out to these customers to understand whether they require similar assistance and assess, on a case-by-case basis, whether it is in line with established risk management principles to provide such arrangements. In the coming days, HKMA will issue a list of frequently asked questions that pertain to the operations of the scheme, and establish a hotline for corporate customers which wish to provide feedback on individual banks’ implementation of the scheme. 

     

    Keywords: Asia Pacific, Hong Kong, Banking, COVID-19, SME, Principal Payment Scheme, Loan Classification, Credit Risk, HKMA

    Featured Experts
    Related Articles
    News

    EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation

    The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).

    May 23, 2022 WebPage Regulatory News
    News

    EBA Publishes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.

    May 23, 2022 WebPage Regulatory News
    News

    EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks

    May 20, 2022 WebPage Regulatory News
    News

    NGFS Report Explores Quantification of Climate Risk Differentials

    The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations

    May 19, 2022 WebPage Regulatory News
    News

    EC Publishes Results on Review of Web Accessibility Directive

    The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.

    May 19, 2022 WebPage Regulatory News
    News

    MAS Consults on Adjustment Spreads for Conversion of SOR Contracts

    The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.

    May 18, 2022 WebPage Regulatory News
    News

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8206