Since the declaration of the state of emergency in Serbia, authorities have introduced scores of measures aimed at easing the financial pressure on both the economy and the public by the COVID-19 pandemic. To that end, the Government issued several decrees on fiscal benefits and financial support schemes, the National Bank of Serbia introduced a moratorium on repayment of bank loans and financial leasing instruments. Neither did Serbia’s Development Fund pass up the chance to contribute to the maintenance of commercial liquidity and financial stability. How so?
The loan repayment moratorium approved by the Development Fund
In line with the decision adopted by the Development Fund (“Fund”), all borrowers regularly meeting their loan repayments, whose annuities are due in 2020, are entitled to loan repayment postponement. This postponement is granted for the period from March 31, 2020 until September 30, 2020, whereas the debt outstanding as at March 31, 2020 is relevant for future debt calculations.
During the standstill period, i.e. between March 31, 2002 and September 30, 2020 no enforced collections will go ahead and no regular or default interest will accrue. Borrowers whose final annuity is due by September 30, 2020 will automatically have the maturity date postponed to December 31, 2020 irrespective of whether the loan in question was approved from the Fund’s assets or in line with the Fund’s commission operations.
After the standstill period, i.e. after September 30, 2020, the Fund will draw up a new amortization plan for all postponed annuities due between March 31, 2020 and September 30, 2020 spreading these annuities across the remaining annuities. This means that the term of relevant loan agreements will not be extended and that the final annuity maturity date remains unchanged.
If you have any additional questions or concerns you can contact us at covid19@geciclaw.com.
