Banks announced Payment Moratorium for Business Companies
Financial and credit institutions united under the Association of Lithuanian Banks (LBA) have taken another step to relieve the situation of customers facing difficulties with COVID-19. Signing a broad private moratorium, the members of LBA undertake to postpone loan payments to companies for up to 6 months, without changing contract terms and interest rates. The moratorium applies to business loans of up to EUR 5 million per group of companies.
"The banks have taken the first signs of COVID-19 driven shakeout seriously and have responded promptly to the changing situation by offering customers a review of their liabilities and repayment schedules. In this period of uncertainty, everyone needs as much clarity as possible. Therefore, after assessing our opportunities and the economic situation in the country, our Members met a decision to give companies the opportunity to postpone their loan payments for up to six months without changing interest. The scope of the moratorium is wide, as the vast majority of credit institutions' business customers have loans of the specified size: they make up about 95% of the number of all business credit agreements. We strive to provide relief to everyone who currently needs it,” Mantas Zalatorius, LBA President, emphasised.
The moratorium was approved by the Bank of Lithuania. "The agreement of credit institutions operating in Lithuania to provide a relief to their clients completing their obligations in a difficult situation is a welcome example of the solidarity in the private business sector. In the fight against the pandemic, the opportunity for businesses and citizens to obtain a temporarily respite will contribute to reduction of the negative consequences for the economy,” claimed Jekaterina Govina, Director of the Supervisory Authority of the Bank of Lithuania.
Business customers of financial and credit institutions that have signed the moratorium will be able to postpone their repayment of the main loan by contacting their financial service provider in writing. Only interest or other periodic payments will remain payable during the deferral period.
Individual decisions will only be made regarding clients, who do not meet the conditions of the moratoria or had significant financial problems, overdue payments or insolvency already prior to March 16, 2020.
The moratorium was signed by the Lithuanian branch of the AS „Citadele banka“, Lithuanian branch of Danske Bank A/S, the Lithuanian Central Credit Union (LCKU) and its financial group, the Lithuanian branch of Luminor Bank AS, UAB Medicinos Bankas, Lituanian branch of the „OP Corporate Bank plc“, UAB „OP Finance“, AB SEB Bankas, Swedbank AB, AB Šiaulių Bankas.
This moratorium is open, all Lithuanian credit market participants, who offer business related loans, can join it under its conditions. The moratorium comes into power on April 24, 2020 and will remain in power until July 1, 2020.
You can review the moratorium’s text on our website here.