Banks will not take enforcement measures for the next three months

Zagreb, 20 March 2020 - During this past period, the Croatian Banking Association has participated in meetings with representatives of the Government of the Republic of Croatia, the Croatian National Bank and the Croatian Bank for Reconstruction and Development, and has proactively presented measures to help the economy of the Republic of Croatia. Banks proposed a series of economic measures aimed at helping enterprises and individuals whose operations have been affected by the coronavirus epidemic.

As a result, the following is an overview of economic measures pertaining to banks’ operations and agreed in coordination with representatives of the Ministry of Finance and the Croatian National Bank to assist citizens and enterprises in Croatia:

1. In order to preserve the financial stability and liquidity of economic factors in the Republic of Croatia, credit institutions shall adopt, in their internal acts, a decision not to take forced measures (distraint, activation of collateral) to collect the debt from their borrowers (natural and legal persons) who do not settle three of their instalments/annuities of their loan obligations for three consecutive months starting in April 2020, provided that this does not put them at a disadvantage as creditors compared to other creditors.

2. Credit institutions shall conscientiously and promptly consider and approve requests by clients (citizens and entrepreneurs) for a deferral of payment for at least three months if their creditworthiness has been severely impaired in the current circumstances due to the loss or reduction of a steady source of income, as well as for the benefit of entrepreneurs whose revenue has been significantly reduced compared to the total revenue in the previous period.

3. During the payment deferral, credit institutions shall only charge the regularly agreed interest, with no additional fees.

4. For the measures expected from credit institutions to be successful, it will be important to ensure the solidarity of other groups of creditors, in order to provide assistance to citizens and entrepreneurs who have truly been economically affected in the current circumstances.

We expect the Ministry of Finance to propose the adoption of an appropriate act as soon as possible, which will fully regulate the deferrals of various payments for the stated 90 days. It is also important for the Croatian National Bank to adopt an appropriate regulatory framework for implementing the same measures as soon as possible.

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