Reliefs on liabilities to banks, which include a grace period, new repayment deadlines and thus a lower installment, can be obtained by the end of April next year.
There is no third moratorium on liabilities to banks and leasing companies that would apply to everyone for now, although many debtors wanted it. The possibility of deferred payment and debt restructuring with new measures of the National Bank of Serbia (NBS) is given only to those who have fallen into difficulties explicitly due to the pandemic and if they meet the prescribed conditions. In order to get new repayment terms and a six-month grace period, it is necessary for them to submit a request to the bank, leasing house or to the addresses of several of them by April 30 next year if they have debts on several sides. It is possible to ask for relief only for some, and not for all debts.
The National Bank adopted similar measures in July, when it enabled debtors to get an additional two years for cash loans, and five for housing loans.
A journalist survey by banks in October showed that there was almost no interest in these measures, as debtors had been protected by moratoriums for a total of five months.
By April next year, when the requests can be submitted according to their number, it will be clear how much the financial crisis caused by the virus has affected the debtors. The benefits apply to individuals, farmers, entrepreneurs and companies.
Debt repayment facilities mean that debtors can get a six-month grace period, ie a period of debt suspension when they do not pay the principal, but they can if they want to pay interest. The new installment of the restructured debt cannot be higher than those from the repayment plan before the relief is granted, and neither the interest nor other elements of the repayment of obligations, such as collateral, can be changed. This time, the central bank does not explicitly state how much additional repayment period the debtor received, but it is calculated in each specific case. The new repayment deadlines thus mean a lower installment.
The criteria for a creditor to be granted relief are that he is unable to meet his obligations to the bank or that he has difficulties only if they are caused by a pandemic of Covid 19. One of the criteria is that the debtor on February 29, 2020, as well as in the 12 months before that day, he had no outstanding liabilities at that bank. Also, that no debtor’s claim was classified as a problem loan in that bank.
In short, that he was a good debtor, but that now, since the circumstances have changed, he has fallen into difficulties. And there are criteria for that: if he is in arrears (delay) longer than 30 days in a materially significant amount on the basis of any obligation to, if he is unemployed or has earned an average net monthly income on the basis of earnings or pension in the last three months average earnings.
Also, if his obligations to banks and leasing companies are burdened by more than 40 percent of earnings, and in the last three months he achieved an average net monthly income lower by 10 percent or more than before March 15, 2020, with an average net monthly the income of that debtor in the last three months does not exceed one thousand euros.
Farmers, entrepreneurs and companies are considered to be unable to meet their obligations if they are in a materially significant amount in arrears for more than 30 days, have a drop in operating income, ie turnover of at least 15 percent in 2020 compared to the same period in In 2019, if the debtor’s business was interrupted for a continuous period of at least 30 days due to the Covid 19 pandemic.
We asked the National Bank what the material amount of the delay was, that is, the delay.
“In principle, we point out that for debtors of legal entities, the amount is materially significant, the amount that is not less than 85 euros, while for natural persons, it is the amount that is not less than 8 euros. We emphasize that this is a delay of more than 30 days on the basis of any obligation to the bank arising from the product to which the regulation applies, in relation to the date of entry into force of the Decision on temporary measures for banks to adequately manage credit risk in a pandemic Covid 19. In this regard, it is necessary for the debtor to be in arrears for more than 30 days on December 15, 2020,” they say in the NBS.
The difference between reprogramming and refinancing
The NBS explains how the measures enable debtors to reprogram and refinance their obligations and how they differ. Reprogramming of the loan is a change in the terms of the loan, so that the debtor is given a grace period in repayment of all his obligations to the bank under that loan for six months, during which the bank does not collect receivables based on principal. The repayment period of that loan is extended so that the amount of annuity (monthly obligations of the debtor) after the expiration of the grace period, and until the end of the new loan repayment period, is not higher than that amount in the period before the relief.
Loan refinancing is the granting of a new loan to a debtor in order to settle all obligations that the debtor has towards the bank on the basis of existing or existing loans, so that the debtor is given a grace period of six months, during which the bank does not collect principal obligations. In that period, it calculates the agreed interest, and the new agreed loan repayment period is determined so that the amount of annuity, ie monthly obligations of the debtor after the grace period, and by the end of the new loan repayment period will not be higher than in the period before the relief.
Loan from the guarantee scheme
On the obligations of debtors on the basis of loans approved under the guarantee scheme of the Republic of Serbia or with the guarantee of international financial institutions, as well as on the basis of subsidized loans, reliefs can be applied only with the prior consent of the guarantor or subsidy.
