Banks to Decide on Extension of Moratorium and Other Exemptions

The 90-day moratorium on the repayment of credits and other obligations has expired for most banks' clients, who are supposed to continue repaying the temporarily paused installments, and each individual bank is to decide for itself on a potential extension of the moratorium and other exemptions.

The Secretary General of the Serbian Association of Banks, Vladimir Vasic, says for Tanjug that the banks will reach a decision for each individual client based on whether there are justified obstacles to continuing the repayment.

According to him, several thousand clients who accepted the moratorium have started repaying their obligations even before the expiration of the 90-day period.

The National Bank of Serbia (NBS), which implemented the moratorium as a measure of preserving the financial system in the conditions of the coronavirus pandemic on March 18 by decree, has not yet given an official confirmation of its extension.

Vasic told Tanjug that the clients had not asked for the moratorium to be extended and that it was all a matter of agreement with the banks.

– It is important for clients to contact the bank if they have a problem and find a solution. From the banks' angle, it is important for them to understand the clients. The moratorium was implemented by the NBS and the banks carried it out, and it is now time to see which client can continue repaying the obligations and which can't for objective reasons – Vasic said.

He says that it is estimated that the moratorium is worth around EUR 2 billion and adds that not all citizens and companies opted for it, as this type of exemption was chosen by 93% of the citizens and around 94% of the companies.

This means that large clients and companies, between 30 and 40%, continued settling their liabilities, he said and added that, nevertheless, the majority of micro, small and medium enterprises had used the option.

Vasic points out that the banking sector has experienced growth in the past years, enabling it to handle the moratorium.

– It is now time for this economic cycle to end and for us to start repaying our obligations, but also spending, so that the economy can progress.

When asked whether the regulators might extend the moratorium for everybody, Vasic says that there is no official position on the issue, but that the banking sector understands the companies and the citizens and that it is in its interest for everybody to be able to repay their obligations.

Vasic has invited everyone with objective problems to contact their banks and others to start repaying their obligations.

The Secretary of the Association for Banking, Insurance and Other Financial Institutions of the Chamber of Commerce of Serbia (CCIS), Katarina Ocokoljic, agrees with Vasic and says that an extension of the moratorium is possible only if each individual bank reaches such a decision in agreement with its clients.

– An extension of the moratorium must exclusively be a decision of the business policy of each bank. The bank needs to reach a decision on whether to extend the moratorium or not based on its abilities – Ocokoljic says for Tanjug.

She points out that the CCIS has not received requests from companies for the moratorium to be extended and adds that each client has the right to contact their bank with a request to have the moratorium extended.

She repeats that the bank then reaches a decision whether to extend the moratorium or not based on its estimates.

Moratorium accepted by over 90% bank clients

The NBS has confirmed that, according to the latest data available, over 90% of bank clients opted for the moratorium.

Considering that this pertains to various banking services, from credits to overdrafts, and that there are 26 banks in Serbia, with retail and corporate clients, the beginning of the repayment is not the same in all banks and for all clients, the NBS points out.

The central bank says that it has recommended to banks, upon the expiration of the moratorium period, to charge regular interest rates calculated during the pause and to make new repayment plans extended by three months.

They also says that the banks are obliged to submit the new repayment plan to all clients who used the moratorium, without any additional costs, and that the repayment plan should be prepared in a way that ensures that the clients are fully informed of all the elements of the obligations and the manner of their settlement.

In line with the NBS' decision, the liability settlement exemptions expired on June 29 for credits and factoring and on June 30 for payment account and credit card overdrafts and off balance sheet liabilities.

Udruženje banaka Srbije

Narodna banka Srbije Beograd

Udruženje za bankarstvo, osiguranje i druge finansijske institucije PKS

Privredna komora Srbije

Association of Serbian Banks

National Bank of Serbia

NBS

Association for Banking Insurance and Other Financial Institutions at the Chamber of Commerce of Serbia

CCIS

Chamber of Commerce of Serbia

Vladimir Vasić

Katarina Ocokoljić

moratorium on credit repayment

coronavirus

covid 19

extension of the moratorium

overdraft

factoring

credit cards

off balance sheet liabilities