Romania’s Ministry of Finance published a draft bill to enact a bank loan moratorium instrument available to debtors, natural and legal persons, facing 25% lower revenues (for firms) or 25% higher expenditures (for individuals) over three months as a result of the ongoing crisis.

Based on their own statements, debtors with reasonably good payment discipline and financial soundness can apply for a moratorium of up to nine months on the loans contracted before the end of April 2022.

Based on procedures outlined in secondary regulations, creditors will evaluate whether the recipients meet the criteria outlined in the bill - namely, whether their financial situation deteriorated as a result of the ongoing crisis.

However, the interest accrued during the moratorium period is capitalised - namely, added to the stock of outstanding debt - which, given the rising interest rates might be quite costly, consequently deteriorating debtors’ post-moratorium financial situation.

There is an exception in this regard for recipients of housing loans guaranteed by the state under the Prima Casa (First Home) scheme, where the interest is treated as a distinct, fully guaranteed zero-interest facility to be paid in instalments.

Separately, there is no information that the Romanian Government has agreed with the European Banking Authority on a special regime for the loans subject to the moratorium - meaning that the banks should classify the loans accordingly and build up provisions. 

(Photo: Kittichai Boonpong/ Dreamstime)

andrei@romania-insider.com