The spread of COVID-19 (hereinafter referred to as coronavirus infection), and the measures taken by countries to fight coronavirus infection have a negative impact on economic activity in certain sectors of the economy. Accordingly, given the global nature of the problem under consideration, it is necessary to take measures to support individual business entities and maintain maximum stability in the country’s banking and financial systems.
As part of measures taken to smooth out the possible negative economic consequences of the spread of coronavirus infection for the population and business entities, including banks and non-bank financial and credit organizations, the Board of the National Bank of the Kyrgyz Republic adopted a resolution on temporary rules for regulating financial activities on March 18, 2020 of credit institutions in connection with COVID 19 pandemic”.
By this resolution, the National Bank introduces temporary requirements for the activities of commercial banks and non-banking financial and credit organizations:
- It is prohibited to charge and levy commissions and other payments related to the revision of the terms of loan agreements;
- It is forbidden to impose and levy penalties, including forfeit (fine/penalty) for borrowers for failure to fulfill / improper performance of obligations stipulated by loan agreements;
- It is recommended to provide a deferral of payments of loans issued for at least three months;
- It is allowed not to worsen the classification category of loans when changing the terms of loan agreements, including restructuring and monitoring for borrowers whose business activities were affected by restrictions imposed in connection with the prevention of the spread of coronavirus infection.
The indicated measures will be valid until the adoption of relevant decision of the National Bank of the Kyrgyz Republic, depending on the economic and social situation in the country.
Reference: www.nbkr.kg, March 19