BNA Order No. 7/21, of 4 June 2021, which entered into force on 5 June 2021 and which will remain in force for a period of eight months, provided for the prudential treatment of credit for which banking financial institutions have granted payment moratoria as a result of the Covid-19 Pandemic, with the aim of supporting clients facing a temporary reduction of liquidity.
The Order applies to: (i) moratoria that foresee changes in payment plans by suspending, postponing or reducing payments of capital, interest, or both, for a pre-defined limited period, without changing any other credit terms and conditions, including the relevant interest rate; (ii) credit agreements in force at the date of declaration of the pandemic that were not in default at that date; and (iii) clients operating in sectors that have suffered the greatest impact due to measures to confine the population, especially culture, sports, education, transport, restaurants and similar, and hotels, tourism and similar.
The Order determined that the approval of a moratorium on the payment of credit liabilities does not imply the reclassification of the client's exposure as restructured credit or with days of payment in arrears. Commercial banks may maintain credit at the assigned risk level at the date of declaration of the pandemic, without considering days in arrears. During the period of validity of the moratorium, commercial banks must continue to assess the client's financial situation on a regular basis in order to identify elements that may indicate changes in their situation, or in the market, which may determine an increase in the default risk in the newly established payment plan. In such cases, banks must change the relevant credit rating in order to adequately reflect the risk.
Clients have 30 days from the publication of the Order to request a moratorium, while any moratoria granted must last no longer than six months. This period may be extended by the BNA, if circumstances so determine.
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