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New Decisions of the National Bank of Serbia offer easier…

Predrag Miladinović i Nevena Vidić • jul 29, 2020

New Decisions of the National Bank of Serbia offer easier loan repayment for citizens

To remedy negative consequences that the Covid-19 pandemic accomplished to the economy, the National Bank of Serbia has adopted decisions published in „Official Gazette“, no. 98/2020 since July 10, 2020.

These decisions made loan repayment much easier for those citizens who took the loan before extraordinary circumstances caused by pandemic situation. Benefits are applied on consumption loans (including consumer loans approved for buying vehicles) cash loans or other loans (which is not residential or account minus).

After decision entry into force, banks would be encouraged to offer refinancing or date changes for the last installment on consumer, cash and other loans approved till March 18, 2020 for two more years longer than the current deadline regime, all these advantages could be offered to debtors who have credit index higher than 60%.

Decision on amendments to the decision on concentration risk management based on banks’ exposure on different types of products prescribes the manner of calculations of individual banks business in relation with risk management of exposure on different types of products, a limitation that relating on that risk, as well as way, form and deadlines report date to National bank of Serbia.

Loans approved until March 18, 2020 that changed maturity dates of the last installments, whereby the maturity of the loan was agreed longer than 2920 days – this does not include exposure calculation if the following conditions are met:

1) The new agreed maturity is no longer than 3285 days, of 3650 days in the case of consumer loans approved for the purchase of vehicles;

2) Changing the date of the last installment that agreed in the period between March 19 and December 31, 2020 that is, between March 19 and December 31, 2021 in case of consumption loans approved for buying vehicles;

3) The loan agreement in which the date of the last installment was changed, did not approve the additional amount of the loan in the period from March 19, 2020 until the final repayment under that agreement.

In this way, the risk of increasing the rate of problem loans in this segment of lending in the period after the expiration of the moratorium is reduced, which contributes to mitigating the crisis.