Statement from Kosovo Banking Association to clarify the news article regarding the interest paid by clients during the pandemic

Statement from Kosovo Banking Association                                                                                                       Pristina, 21 May 2020

The Kosovo Banking Association has issued a statement to clarify the news that was published in some news portals on 20.05.2020 titled “CBK issued a pre-emptive warning to punish banks that are asking customers to pay interest during the pandemic”.

Commercial banks in our country are operating in accordance with the regulations provided by government institutions and CBK and according to international standards. Therefore, in order to prevent the misinformation of the public from this media article distributed on several portals, we would like to emphasize once again that in all relief measures taken by banks, including cases approved to postpone loan payments, only the regular interest is being applied while the penalty interest related to these loans will not be applied. During this period, borrowers will also not be subject to lower classifications in their credit rating. This practice is in line with international standards and has been applied in all countries that have provided such mitigation measures during COVID-19.

Refering the joint communication as below:

“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”.

We reconfirm that banks in Kosovo are implementing this decision and will continue to be at the service of citizens for all banking services throughout Kosovo,  regardless of the current circumstances at this time of COVID-19 pandemic.

We thank all the media which are doing an extraordinary job of informing the public with accurate and verified information.