The National Bank of Serbia has adopted new measures to facilitate loan and financial leasing instalment repayments to corporate clients affected by COVID-19 pandemic, which have come into force on 15 December 2020.
Banks and financial leasing providers are obliged to publish on their websites an offer to the clients affected by COVID-19 pandemic for a six-month moratorium on their obligations under the loans and financial leasing agreements, or for a refinancing of the loans (and other loan products such as credit cards and overdrafts) with a six-month grace period. The offer must be published by 20 December 2020. Moreover, the clients who were on 30 November 2020 in default with their obligations for a period of 30 days or more must receive individual notice of the offer. The clients can apply for the moratorium until 30 April 2021 and the banks/financial leasing providers must decide upon each application within 30 days from the receipt thereof.
Who can apply for moratorium?
Moratorium is available if the corporate client satisfies the following three cumulative conditions:
- is unable to pay its obligations when due or has difficulty to meet its obligations due to COVID- 19 pandemic; this will be the case when the client (i) was on 15 December 2020 in default under the relevant loan/financial leasing agreement for more than 30 days; or (ii) has generated in 2020 (until the date of the moratorium application) at least 15% lower turnover compared to the same period in 2019; (iii) ceased its business operations for a continuous period of at least 30 days due to the COVID-19 pandemic; or (iv) on the basis of the client’s reasoned application for moratorium, the bank/financial leasing provider has determined that due to COVID-19 pandemic there are other facts and circumstances that affect client’s ability to meet its obligations;
- was not, as of 29 February 2020 and for the 12-month period preceding that date, in default with its obligations under the relevant loan agreement or, with respect to financial leasing, had not been in the same period in default which is longer than 90 days); and
- in case of loans, the loan in question was not on 29 February 2020 and for the 12-month period preceding that date classified as an NPL by the bank.
Moratorium/grace period may not be accompanied with new terms and conditions (e.g. interest rate, the amount of monthly instalments, additional collateral, etc.) that are more onerous for the client compared to the existing ones.
If a corporate client opts into the offered moratorium, the interest that accrued during the previous moratorium that lasted from July 2020 until 30 September 2020 is also subject to the moratorium. Contractual interest runs during the moratorium period and is payable during the grace period or upon its expiry, depending on the model the client chooses. If the interest is payable after the expiry of the moratorium, it can be capitalized and spread equally over the remaining repayment period.