MNB Issues Circular on Credit Assessment of Customers Using Moratorium
MNB formulated its expectations on the assessment of creditworthiness of customers using the payment moratorium, in a management circular sent to credit institutions, financial enterprises, and domestic and cross-border payment service providers. MNB expects that the assessment of debtors' creditworthiness will not deteriorate due to the moratorium that has been provided as a relief measure amid the COVID-19 pandemic.
MNB is of the opinion that the concerned debtors cannot be recorded as bad debtors only on the basis of the information on the moratorium and their situation must be examined individually in each case. To maintain systemic lending activity and prudent risk management, MNB expects credit institutions to report data on the moratorium to the Central Credit Information System (CCIS) in accordance with the applicable legislation. MNB will pay close attention to the fulfillment of these expectations during its on-site inspections and off-site supervision activities.
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Keywords: Europe, Hungary, Banking, COVID-19, Loan Moratorium, Credit Risk, Loan Repayment, Basel, MNB
Victor Calanog, Ph.D.
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