The government on Wednesday adopted an emergency ordinance according to which the payment of installments to the bank can be postponed for a maximum period of 9 months, and the deadline by which such applications can be submitted has been extended until March 15, 2021.

“It is an ordinance that many Romanians are waiting for. It is about the amendment of Ordinance 37 on granting facilities for loans granted by credit institutions and non-banking financial institutions to certain categories of debtors. It is about extending the payment of installments to the bank. The EBA (European Banking Authority) initially told us very clearly that they can only be extended for nine months. He came up with explanations and now we can tell you that there are no limits for those who can apply, but, yes, the maximum is nine months. If you had a delayed rate for nine months, you can’t extend it, but the others can go up to nine months and the good part is that there are people who have not been part so far (from the program – no), they can apply to this measure “, said the prime minister Florin Cîţu in a press conference at Victoria Palace.

He added that requests for the suspension of the payment of obligations can be sent to the creditor until March 15, 2021, who will perform the analysis and issue the decision by March 31 at the latest.

“The conditions remain about the same, debtors must declare on their own responsibility the decrease of income, receipts, by at least 25% of the last three months prior to the request for suspension of payment obligations, by reference to the similar period 2019-2020. The conditions are the same, almost nothing changes, only we extend the period and those who have opted for less than nine months can now go up to nine months “, the prime minister explained.

Who can request the postponement of installments

The maximum period of 9 months also includes the period for which the loans were suspended based on GEO 37/2020, of a non-legislative moratorium or in both cases, states a communiqué of the Ministry of Finance.

Debtors who have entered into a contract to obtain a loan that has not reached maturity and for which the creditor has not declared the early maturity on 31 December 2020, inclusive, and do not record arrears at the date of application may benefit from these facilities.

“For mortgage loans contracted by individuals for whom the request for suspension of payment obligations was made until June 15, 2020 according to law, with the end of the deferral period prior to the entry into force of this normative act, the suspension of additional payment obligations up to a maximum of 9 months, it is applied by cumulating the receivable / residual receivable related to the interest calculated in the first suspended period according to GEO no. 37/2020 with the receivable related to the interest calculated for the second suspended period. At the resulting receivable, the interest is 0% and the payment by the debtor of this receivable will be made in installments in 60 equal monthly installments starting with the month immediately following the end of the second deferral period “, states the Ministry of Finance.

How many Romanians have asked for the installments to be postponed

The total balance of loans for which requests for deferral of payment were approved by the end of September 2020, in the context of the COVID-19 epidemic, amounts to 42.9 billion lei and were granted to a number of approximately 558,000 debtors, the amount these loans representing 14.7% of the total loans granted by the banking sector. Out of the total of 42.9 billion lei representing the credits postponed by the legislative and non-legislative moratorium, 32.4 billion lei represent the amounts postponed by the legislative moratorium (GEO 37/2020) and 10.5 billion lei by the non-legislative moratoriums legislation.

The interest due by debtors corresponding to the due amounts whose payment is suspended is capitalized at the balance of the existing credit at the end of the suspension period. The capital thus increased shall be paid in installments for the remaining period until the new maturity of the loans, subsequent to the suspension period.

As an exception, for mortgage loans taken out by individuals, the interest related to the suspension period is calculated according to the provisions of the credit agreement and represents a distinct and independent claim in relation to the other obligations arising from the credit agreement. At this receivable the interest is 0% and the payment by the debtor of this receivable will be made in installments, in 60 equal monthly installments, starting with the month immediately following the end of the deferral period. The Romanian state guarantees 100% interest on the suspension period for mortgage loans contracted by individuals.