Recent Developments
The Banking Regulatory and Supervisory Authority ("BRSA") has taken new measures regarding the COVID-19 outbreak in its decisions dated March 27, 2020 and nos. 8970 and 8971.
Measures
- If the principal and interest payments of consumer and vehicle loans extended by banks, financial leasing, factoring and financing companies are postponed until December 31, 2020, the delay will not be taken into account in determining maturity limits that range from 48 to 60 months.
- The 30-day delay envisaged for credits to fall from the first category to the second category will now be 90 days, effective from March 17, 2020 to December 31, 2020. Provisions for loans that continue to be classified in the first category, despite the 30-day delay, will continue to be set aside according to the banks' risk models when calculating the expected credit losses under TFRS 9.
Conclusion
The BRSA aims to soften the expected disruptions of the COVID-19 pandemic on economic and commercial activities by providing flexibility in credit defaults and credit postponements.
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