National Bank of Serbia Introduces 90-Day Moratorium on Loan Repayments
On March 17, 2020, Serbia’s central bank (Serb. Narodna banka Srbije – NBS) adopted two decisions on temporary measures, imposing a minimum 90-day delay on bank loan repayments and leasing repayments applicable to all businesses and the general public alike.
This newly adopted legislation is just one amongst the many introduced, and still being contemplated, measures to shore up liquidity in an attempt to preserve the country’s financial stability against COVID-19 fallout.
The delay is generally applicable and includes natural persons, farmers, entrepreneurs, SMEs and corporations. It will last for at least 90 days, if not longer, until the end of the coronavirus state of emergency (which was formally imposed on March 15, 2020).
As a result, debtors will be freed of any repayments under a bank loan and/or lease during the coronavirus state of emergency. However, debtors who are still willing and able to make repayments will not be prevented to do so (a regime of so-called natural obligations in continental/civil law).
By contrast, all others will be protected from any kind of enforcement or other legal measures. In addition, there will be a stay of statutory interest accrual. Moreover, banks and leasing companies are strictly prohibited from charging any extra fees or costs in relation to the application of the legislation.
The legislation introduces transparency requirements, whereas banks and leasing companies are obliged immediately to publish a notice on the delay of repayments on their websites. The publication is given legal effect of notice to each individual client. NBS introduced an interesting and unusual nudge for Serbian law: in the case a client does not opt-out fo a bank’s/leasing company’s offer to delay repayment, he will be deemed to have accepted the offer.
Governor Jorgovanka Tabaković concluded that “[f]inancial stability is quintessential in ordinary times let alone when a state of emergency has been introduced in the country. The National Bank of Serbia in coordination with other State stakeholders undertook and will undertake all measures necessary to protect stability and ease the position of the general public and businesses under these extraordinary circumstances. Consciousness of the necessity for responsible behavior of all market participants in these sensitive times is of paramount importance in order to overcome the difficulties we are facing.”
NBS also adopted a set of other measures and instructions regarding its own business practices and remote work during the coronavirus pandemic.
Official NBS statements in Serbian: https://www.nbs.rs/internet/cirilica/scripts/showContent.html?id=15321&konverzija=no
https://www.nbs.rs/internet/cirilica/scripts/showContent.html?id=15314&konverzija=no
For more information, please contact us via covid19@geciclaw.com
