Joint communication by the Central Bank of the Republic of Kosovo and the Kosovo Banking Association
Given the situation occurred due to the spread of the infection caused by the Covid-19 virus, the Central Bank of the Republic of Kosovo has taken some measures regarding the normal functioning of the financial system. Measures taken by the Government of the Republic of Kosovo to stop the spread of the infection caused by the COVID-19 virus are expected to affect the development of business activity, and consequently reduction of the level of revenues for businesses in the country. The slowdown of business activity in the Republic of Kosovo may affect their solvency.In this regard, Governor Mehmeti, together with members of the Executive Board, has held meetings over the past two weeks whereby discussed about the developments in country.
The Executive Board, on 15 March 2020, also met with the Board of the Kosovo Banking Association (KBA), whereby discussed about measures that the CBK and the banking sector should take in order to maintain the financial stability in country, and the normal functioning of the banking sector, such as in normal execution of payments, supplying with cash throughout the territory of the country, and especially in cities which have been quarantined.
Likewise, the CBK together with the KBA have jointly decided that for businesses and individuals, due to the situation occurred in the country and the decrease of the level of their revenues, to suspend the payment of loan instalments, starting from 16 March 2020 until 30 April 2020, and depending on the situation, this suspension should be considered for a longer period. Suspensions of payment of loan instalments will be reviewed on a case-by-case basis so that banking sector help their clients to overcome the current situation.
Borrowers, who have faced financial difficulties as a result of decrease in personal or business revenues, should contact their banks with a request to suspend payment of loan instalments. In the event of bank approval, the credit-related penalty interest shall not apply during this period.
During this period, no credit rating downgrade measures shall be applied to borrowers.
In this case, when suspending the payment of loan instalments, the CBK has taken all necessary legal measures to prevent the loans from being rated, to require no additional provisions and not to be rated as non-performing loans in the Credit Registry.
Based on the abovementioned, the Central Bank of the Republic of Kosovo, as the only institution responsible for licensing, supervising and regulating financial institutions, in support of the economy, businesses and citizens of the country, in the conditions of the situation occurred in the country, due to the spread of the Covid-19 virus, has decided to temporarily suspend some of the provisions of the CBK Regulations related to the stability of the country's financial system.