Another moratorium on financial liabilities from 1 August to 30 September 2020
Banks/financial leasing institutions („FIs”) are obliged to offer a delay in the repayment of liabilities (moratorium) to natural persons, farmers, entrepreneurs, and companies by 31 July 2020, according to the new Decision on temporary measures for banks to mitigate the consequences of the COVID-19 pandemic in order to preserve the stability of the financial system (Decision on the moratorium for banks) / Decision on temporary measures for financial lease providers to mitigate the consequences of the COVID-19 pandemic in order to preserve the stability of the financial system (Decision on the moratorium for financial lease providers), introduced on 27 July 2020.
Notice on moratorium
The notice about the offer of the FIs will be published on their websites, and shall contain information about the beginning and duration of the moratorium, calculation of interest, method of repayment of obligations after the moratorium, possible alternative ways of repayment, as well as a representative example of the amount of the obligation before and after the end of the moratorium.
The debtor may reject the offer for the moratorium electronically (by email or fax), via post, by telephone or on the business premises of the FIs, within ten days from the date of publication of such notice. Additionally, the debtors are entitled to reject the moratorium, informing the FIs in the previously described manner or by payment in full of the due and outstanding liabilities.
If the debtor does not inform the FIs by stating that it rejects the moratorium within ten days from the day of publishing the notice, it shall be considered that he has accepted the offer.
Applicability of moratorium
The moratorium applies to liabilities in the form of bank loans, overdrafts and credit cards, as well as other banking products such as liabilities incurring interest rate, risk hedging instruments related to loans and/or credit products, bank guarantees, etc.
The moratorium does not apply to the services such as the commission for the execution of transactions, account maintenance fees, as well as broker-dealer operations, services related to safe deposit boxes, etc.
Calculation of interest
During the moratorium, the FIs shall not charge contractual interest on liabilities that fall due during the moratorium.
The FIs shall calculate the contractual interest on the outstanding debt, and the amount of contractual interest shall relate to the amount of that interest in the repayment plan which was applied before this decision came into force. If the debtor is a company, the FIs may also charge regular interest on the principal amounts of the debt that fall due during the moratorium.
When it comes to interest on arrears, the FIs will not charge it for the outstanding debt which matures during the moratorium.
Ban on enforcement proceedings
The enforcement proceedings will not be initiated, as will not the procedure of forced collection against the debtor, i.e. no other legal actions will be taken towards collecting claims.
Expiration of moratorium
Upon the moratorium expiration, the FIs will distribute the accrued contractual interest evenly over the repayment period (without attributing it to the principal debt), with the repayment period being extended for the duration of the moratorium.
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