Coronavirus (COVID-19): Credit Facilities Adopted by the Government of Romania
Publication: ZRVP
In the meeting of March 30, 2020, the Government adopted the Emergency Ordinance no. 37/2020 on the granting of facilities for the credits granted by credit institutions and non-banking financial institutions to certain categories of debtors, published in the Official Gazette no. 261/30.03.2020.
Who benefits from the application of this ordinance?
- Natural persons, which category includes also (i) authorized natural persons, individual undertakings and family undertakings, (ii) natural persons exercising liberal professions, as well as the ones exercising certain professions under special laws;
- Legal persons, except for credit institutions.
To what types of financial obligations does this ordinance apply?
- All types of credits
- Financial leasing agreements
Conditions to benefit from facilities
- The credit has not yet reached its maturity;
- The creditor has not declared early maturity prior to the effective date of this ordinance;
- The credit does not have any outstanding payments on March 16, 2020 or, if there have been such outstanding payments, they are paid until the date of the request to suspend the payment obligation;
- Debtor’s incomes have been impaired directly or indirectly by the serious situation generated by the COVID-19 pandemic. The meanings of “direct or indirect impairment” of a debtor’s incomes in the pandemic context will be detailed in the rules of application of the ordinance;
- In the case of legal persons, these must meet also the following conditions:
- they have interrupted their activity fully or partially as a consequence of the decisions issued by the public authorities, during the state of emergency or their incomes or incoming payments have diminished by minimum 25% in March 2020 as compared to the average mean of January and February 2020 and they have an emergency situation certificate issued by the Ministry of Economy, Energy and Business Environment;
- they are not in insolvency at the date of the request to suspend the reimbursement of the credit, according to the information available on the webpage of the National Office of Trade Register.
Facilities to postpone payment obligations. Request and granting procedure
- Payment of financial obligations (including capital rates, interests and commissions) for loans granted until the effective date of this ordinance shall be suspended at debtor’s request by maximum 9 months, but no longer than December 31, 2020. The maximum maturity of any loan shall be prolonged by the suspension term or, if the age limit is exceeded for the granting of the credit, this shall be restructured by creditors to obtain the falling within the scope of the age limit;
- To benefit from the delay facilities, debtors shall transmit creditors a request to this end in letter format, by e-mail or verbally at a phone number to be announced by each creditor. Any request must be made in maximum 45 days from the effective date of the ordinance;
- Creditors shall analyze the requests and shall approve them in the conditions to be provided by the rules of application of the ordinance;
- Agreements shall be prolonged from the date of submission of the suspension requests that are approved by the creditors.
Treatment of interests related to the suspension term. State guarantee
- As a rule, the interests calculated and accrued during the suspension term shall add to the credit balance existing at the end of the suspension term, and the capital so increased shall be paid according to a schedule of installments during the term remained until the new prolonged maturity;
- By way of exception, in the case of mortgage credits contracted by natural persons, the accrued interest for the suspension term shall be calculated according to the credit agreement and represents a distinct receivable, with 0 interest and payable in a term of 60 monthly installments starting from the month immediately after the end of the suspension term;
- The state, by the Ministry of Public Finance and by the National Credit Guarantee Fund for Small and Medium-Sized Enterprise (FNGCIMM), shall guarantee by 100% the interest accrued during the suspension term related to mortgage credits for natural persons;
- After a payment is made by FNGCIMM under the above-mentioned guarantee, such payment shall become a receivable against a debtor natural person, a budgetary receivable that will be recovered by the National Agency for Fiscal Administration.