Article provided by Impetum Group
Among the reactions that the Government of Romania has had to diminish the effects determined by the COVID-19 pandemic on the local business environment are the GEO 37/2020, which provides for the possibility of deferral by banks and non-bank credit institutions of interest rates and loans. The main beneficiaries of the measure published in the Official Gazette are: natural persons, PFA, individual and family businesses, liberal professions and legal persons from credit contracts, respectively leasing. According to CITR and Impetum Group specialists, the suspension can take place for up to 9 months (minimum 1 month suspension time) for capital rates, interest and commissions, and the deferred payment will not be classified as non-performing exposure.
"The normative act regulating the possibility of delaying the payment of the installments to be due represents a welcome measure for the economic environment, which creates the possibility of the debtors whose incomes have been affected by the COVID-19 pandemic to protect themselves in case of the impossibility of payment. of the installments due for a period that cannot exceed 31.12.2020. The positive effect of this measure will, however, depend on the way in which the Executive will elaborate the norms of application of this normative act and on the opening of the banking environment, which has the possibility to either limit or extend the benefits. We are confident that it will go to the granting of benefits and not to the refusal to grant them for certain debtors ”, said Adrian Lotrean, Senior Partner Impetum Group and CITR.
In order to benefit from the measure, the loans must have been contracted prior to the entry into force of the GEO; not to have been declared due in advance prior to the entry into force of the ordinance; there should be no arrears on the date of establishment of the state of emergency (16.03.2020) or payment of the arrears until the date of the request for suspension. Individual debtors must have been directly or indirectly affected by the serious situation generated by the COVID-19 crisis pandemic. The other entities can benefit from the provisions only if they completely or partially interrupt their activity as a result of the decisions issued by the public authorities, during the state of emergency and hold the emergency certificate issued by MEEMA or hold the emergency certificate issued by MEEMA, which is based on declarations on their own responsibility a decrease of revenues or receipts with a minimum of 25% in March 2020 compared to the average of January-February. 2020 is not insolvent at the date of requesting the suspension of credit repayment.
Procedure to take advantage of the measure:
Submitting to the lender a request in letter format, by electronic mail or orally, to a dedicated telephone number that will be announced on the lender's website;
Submission of the application within 45 days from the date of entry into force of GEO / 2020;
The analysis and approval of the application by the creditor is done according to the rules of application of GEO 37/2020;
In the case of approval, the extension of the contractual period from the date of communication of the suspension request addressed to the creditor takes place.
Benefits for approving the 9-month suspension of credit facility rates:
During the period of suspension (maximum 9 months, but not more than 31.12.2020) the debtor will not pay to the credit institution any payment related to the credit facilities in question (principal, interest, commissions);
The repayment terms of the lending facilities will be automatically extended with the period of suspension of the rates;
The interest during the suspension period will be capitalized on the principal of the loans and staggered until the new maturity of the loans (except the mortgage loans of the natural persons borrowers);
The value of the principal of the loans will increase with the interest calculated during the suspension related to the credits in the balance;
The debtor will pay, after the expiration of the period of suspension, interest applied to the new value of the principal, for all the credit facilities that benefit from suspension, except the mortgages of the natural persons. For these, the interest related to the suspension period will be staggered in a separate facility with a maturity of up to 5 years, with interest 0.
The bank commissions related to the loans will not be capitalized during the 9 months, these being totally exempted from the payment for this period;
The modification of the contracts will take place through the effect of the law without the conclusion of additional acts. Within 30 days of receiving the request, the creditor notifies the debtor the contractual terms modified according to the present GEO.