Banking Agency: Moratorium for all citizens whose income has been reduced or is not being paid

For fuller public information and further clarification of the adopted measures, the Banking Agency of FBiH clarifies to the public everything related to the application of the moratorium on loans for individuals and legal entities.

The Banking Agency of FBiH informs the public and citizens that a moratorium or some other relief measure will be introduced for loan repayment for all citizens whose creditworthiness has been reduced as a consequence of the negative effects of the declared state of emergency in the Federation of BiH.

"Officials, state employees, employees of public enterprises, budget beneficiaries, as well as all others whose income is regularly paid are not covered by the temporary measure of a moratorium on loan repayment. Exceptionally, these individuals may also submit a request if a member of their household has had their creditworthiness reduced due to the negative effects of the state of emergency, and whose creditworthiness of household members was assessed when granting the loan. We understand the citizens' fear and the demands from some parts of the public for a moratorium for everyone, but a decision that would place an employee who lost their job in the same status as an employee of a state-owned enterprise who has regular income is impossible.

The same logic applies to legal entities, as all state institutions and legal entities with stable operations or even increased turnover cannot be entitled to a moratorium. That right is intended for legal entities whose business operations have been significantly hampered as a consequence of the negative effects of the declared state of emergency in the Federation of BiH.

All those who can pay their financial obligations at this moment should do so, especially the public sector, because only in this way can we help those in need and contribute to overcoming this crisis. On the other hand, all citizens and legal entities directly or indirectly affected by the negative effects of the coronavirus have the right to request a 90-day moratorium from their banks, during which loan repayment is suspended and no late interest is charged, after which they can negotiate other measures with the bank.

Most banks have already prepared procedures for simple and secure communication with clients. Banks will also initiate these activities on their own initiative if they determine that the client's repayment capacity is threatened or if they cannot contact the client.

The Banking Agency of FBiH has also provided a legal and regulatory basis for regulatory obligations of financial institutions to be suspended during the moratorium measure (e.g., additional provisioning, reclassification), as well as for the moratorium not to affect the deterioration of client ratings (worse categorization).

"In addition to the moratorium on credit obligations, regulatory relief has also been provided for banks to approve liquidity loans for legal entity clients with the aim of ensuring the liquidity of the economy and saving jobs," they emphasize.

The Banking Agency of FBiH emphasizes that in these extraordinary circumstances, it is necessary to relieve citizens and legal entities whose purchasing power is threatened due to the pandemic, while at the same time protecting the stability of the financial system and depositors. The Agency has approached this issue very seriously, keeping in mind that hasty actions and mistakes can cause enormous damage to the financial system, which would ultimately only further complicate the already difficult situation.

"Our responsibility is to prevent such scenarios in these moments and to protect citizens, the economy, and the financial system," they add.