Central Bank of Bahamas Allows Loan Payment Deferral Amid COVID Crisis
The Central Bank of Bahamas arranged with domestic banks and credit unions to provide a three-month deferral against repayments on credit facilities for businesses and households that were negatively impacted by the COVID-19 pandemic. This measure will be reviewed in June 2020, for appropriate changes that may still be warranted. However, some financial institutions already announced credit support that could extend beyond three months. The Central Bank will extend tolerant regulatory treatment to exclude these credit balances from being classified as arrears or restructured loans.
Forbearance will also be provided for borrowers who maintained their accounts in good standing before the onset of the pandemic. It is on the condition that such payments will resume, with accrued interest, when the financial circumstances of such borrowers recover. More details on the payment deferrals arrangements will be released in the coming days. The Central Bank will continue to monitor economic conditions and make adjustments to monetary and prudential policies that promote and preserve the stability of the financial system.
Borrowers should be advised that, since any credit on which repayment has been postponed will continue to accrue interest, they should only take advantage of payment deferrals when other options or adjustments do not exist. Borrowers who can afford to do so are encouraged to continue making loan payments, rather than see their loans increase through accrued interest. In all instances, borrowers are urged to inform their lending institutions of hardships they may be experiencing from loss or reduction in cash flows, income, or employment.
Keywords: Americas, Bahamas, Banking, COVID-19, Loan Payment, Credit Risk, Restructured Loans, Central Bank of Bahamas
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