The proposal of the ABB to extend the deadline for submitting requests by bank customers under the Procedure for Deferral and Settlement of Liabilities payable to Banks and their Subsidiaries (Procedure for deferral) until the end of March 2021 was approved by the Governing Council of the Bulgarian National Bank (BNB).
The Association has made a proposal regarding the deadline for the submission of requests under the Procedure for deferral in connection with the decision of the European Banking Authority (EBA) of the 2nd of December 2020 to adopt new EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis (EBA/GL/2020/15), allowing the introduction of a new deadline of the 31st of March 2021.
The BNB Governing Council also approved the ABB’s proposal to extend the deferral period by the maximum possible 9 months as it is in the EBA Guidelines, including the period of the already approved deferral.
Pursuant to para. 2 of the Additional Provisions of the Procedure approved by the BNB Governing Council and applied by the banks, any changes in it, including the deadline, shall be applied after the explicit approval by the BNB Governing Council.
This is the second extension of the deadline for submitting requests by the bank clients under the Procedure for deferral, approved in April as the deadline for application was extended in July when the bank clients received another 90 days (until the end of September 2020), during which they can apply for a deferral of repayment of their loans.
The changes in the Procedure for deferral are going to enable the banks, in the conditions of favorable regulatory treatment, to provide relief to the borrowers in repaying their loans and will help preserving the capacity of banks to provide new loans.
So far, many individuals and legal entities affected by the pandemic have benefited from the measure. According to the data provided by the BNB, at the end of October 2020 nearly 89,000 requests of companies and households at the total amount of more than BGN 8.5 billion were approved. The BNB data also take into account the information about those borrowers for whom the grace period under the moratorium has expired by the end of the reporting date, as well as the borrowers who have initially applied for the moratorium but voluntarily resigned.
Clients and banks are free to negotiate individually any other ways to facilitate the repayment of their loans, in accordance with the requirements of the regulations.