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.
Related Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.
